Prenuptial Agreements -- What the Law Allows
by Shae Irving & Katherine E. Stoner,
Attorney-Mediator
Understand what you can accomplish by making a prenuptial
contract before you marry.
If you're trying to decide whether or not to make a
prenuptial agreement (also called a premarital agreement or
just a "prenup"), you'll need to understand what this type
of contract can -- and can't -- do for you.
What You Can Do With a Prenup
A prenup may help if you have one or more of the following
goals:
Keep finances separate. Every state has laws designating
certain kinds of assets accumulated during marriage as
marital property or community property, even if these assets
are held in the name of just one spouse. If a couple
divorces, or when one spouse dies, the marital or community
property will be divided between them, either by agreement
or by a court. If you want to avoid having some or all of
your individual accumulations during marriage divided up by
a court, you can do so with a premarital agreement.
Protect each other from debts. Some of us bring debts, as
well as assets, to a marriage. If there's no prenup,
creditors can sometimes turn to marital or community
property to satisfy the debts of just one spouse. But if you
want to make sure that saying "I do" does not mean saying "I
owe," you can use a prenup to limit your liability for each
other's debts.
Provide for children from prior marriages. A prenup is
helpful (perhaps essential) if either of you has children
from another relationship and you want to make sure that
your children inherit their share of your property. In a
prenup, one or both spouses can give up the right to claim a
share of the other's property at death, perhaps in exchange
for an agreed upon amount of property.
Keep property in the family. If your property includes
something you want to keep in your birth family, whether it
be an heirloom or a share in a family business, you and your
spouse can agree that it will remain in your family, and you
can specify that item in your prenup. This can even include
property that you expect to receive in a future inheritance.
Follow through by making your estate plan. In addition to
using your prenup to waive inheritance rights and state your
intentions for passing on your property at death, it's vital
that you prepare the estate planning documents -- a will,
living trust, and so on -- that actually transfer your
property as you intend.
Define who gets what if you divorce. Without a prenup, state
law will specify how your property will be divided if you
ever divorce. These laws may dictate a result that neither
of you wants. You can use a prenup to establish your own
rules for property division and avoid potential
disagreements in the event of a divorce. In most states, you
can also make agreements about whether or not one or both of
you will be entitled to alimony. Some states forbid or
restrict agreements about alimony, however. (See "What You
Can't Do With a Prenup," below.)
Clarify responsibilities during the marriage.
In addition to
the reasons listed so far, there are countless other uses
for a prenup, depending on your circumstances. Here are some
examples of other matters people include in their prenups:
- whether to file joint or separate income tax returns
or to allocate income and tax deductions on separate tax
returns
- who will pay the household bills -- and how
- whether to have joint bank accounts and, if so, how
to manage them
- agreements about specific purchases or projects,
such as buying a house together or starting up a
business
- how to handle credit card charges -- for instance,
whether you will use different cards for different types
of purchases, what kinds of records you will keep, and
how you will make payments
- agreements to set aside money for savings
- agreements for putting each other through college or
professional school
- whether you will provide for a surviving spouse --
for example, in your estate plan or with life insurance
coverage, and
- how to settle any future disagreements -- for
example, you might agree to hire either a mediator or a
private arbitrator.
What You Can't Do With a Prenup
There are some things you just can't -- or shouldn't -- do
with a prenup. State laws differ as to what matters are
considered off-limits. However, as a general rule, any
agreement to do something that is illegal or against
state-defined public policy will be considered unenforceable
-- and may even jeopardize other valid aspects of the
premarital agreement. Here are some things that you usually
cannot do:
Restrict child support, custody, or visitation rights.
No
state will honor agreements limiting or giving up future
child support. The same holds true of agreements limiting
future custody and visitation rights. This is because state
lawmakers consider the welfare of children to be a matter of
public policy and do not enforce any private agreements that
would impair a child's right to be supported or to have a
relationship with a parent in the future.
Give up the right to alimony, in a few states.
A handful of
states similarly limit your ability to give up your right to
alimony -- also called spousal support or separate
maintenance -- if there is a divorce. Other states permit
such waivers, so you will need to know what your state laws
say if you are considering this kind of agreement. (You can
find the law for your state in Nolo's book, Prenuptial
Agreements: How to Write a Fair & Lasting Contract, by
Katherine E. Stoner, Attorney-Mediator and Shae Irving,
J.D.)
"Encourage" divorce. At one time, many courts viewed any
prenup specifying how things would be divided up in case the
couple splits as void and unenforceable because it promoted
divorce. The modern approach allows such agreements, but
judges in some states still take a hard look at them. If the
agreement appears to offer a financial incentive for divorce
to one party, it may be set aside.
Make rules about nonfinancial matters. For practical
reasons, you should keep personal agreements out of your
prenup. Here is a partial list of nonfinancial matters that
sometimes find their way into prenups, but are better dealt
with separately. Of course, the possible issues are endless
and you may think of many that aren't mentioned here:
- responsibility for household chores -- from laundry
to cleaning to car care
- use of last names after you marry
- agreements about having and raising children, such
as birth control, having children, children's names,
child care responsibilities, and education
- how you will relate to in-laws or stepchildren, and
- whether you will have any pets and who will be
responsible for them.
These kinds of nonmonetary agreements aren't binding in
court, and in fact they could cause a judge to take your
entire prenup less seriously. Rather than including personal
matters in your prenup, you may find it helpful to simply
make a list of your most important concerns and discuss them
together. If you want to take it a step further, you can
underscore your commitment by writing down your personal
agreements in a separate document -- perhaps in a letter
that each of you writes to the other, clarifying your
intentions and wishes.
If you are considering a prenup, or are ready to make one,
get Prenuptial Agreements: How to Write a Fair & Lasting
Contract, by Katherine E. Stoner, Attorney-Mediator and Shae
Irving, J.D. (Nolo). It provides everything you need, from
deciding whether a prenup is right for you to negotiating
and drafting the agreement.
© 2010 Nolo
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