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What You Need to Know About Prenuptial Agreements

by Carolina AttorneysFebruary 21, 2018 Divorce, Family Law, Prenuptial Agreements0 comments

What is a Prenuptial Agreement?

A prenuptial agreement is a premarital agreement that is entered into before marriage and sets out the terms of separation. Prenuptial agreements are usually enforceable unless the agreement was entered into under duress, fraud or the agreement sets out unreasonable grounds thus rendering it void as a matter of public policy. Prenuptial agreements are usually signed after the couple enters into an engagement and before the marriage ceremony. Individuals who want prenuptial agreements are usually wealthy individuals, individuals who have been married before or people of advanced age. As mentioned, prenuptial agreements can include any terms over which the couple wants to contract over unless it is illegal. Couples frequently contract over asset and debt distribution, liabilities and child rearing. Some agreements include unusual, but legal terms, surrounding monetary penalties after infidelity as well as who retains custody of a pet during separation. Although couples can choose to contract over a wide range of topics, there are standard requirements contracting parties must follow that will result in an enforceable contract.

What Constitutes a Valid Prenuptial Agreement?

Parties must agree to a written contract that is signed before the marriage in order to constitute a valid prenuptial agreement. Firstly, both parties must freely enter into the contract without any pressure or duress. Secondly, all terms must be reasonable and fair. The terms contemplated in the agreement should apply to both parties where possible as to not bias one party over the other. Further, terms that are too speculative, overly personal (i.e., how a spouse should keep his or her appearance), or far-reaching (i.e., agreements seeking to control the actions of non-parties). Each party must fully disclose all assets, debts and liabilities. This rule usually targets the higher earning spouse who does not want a lower earning spouse to have a clear picture of the sources of their wealth. This rule also applies to spouses who are in heavy debt and seek to hide the debt. Importantly, each party to the prenuptial agreement should hire his or her own attorney to seek legal advice. It is a conflict of interest and unethical for one attorney to represent the interests of both parties who are in effect, adverse parties, for the purposes of the agreement. Even if one party chooses not to hire an attorney, that party should know that they are entitled to an attorney if they so choose.

Common Prenuptial Agreement Disputes

Common disputes that arise out of prenuptial agreements come to bear during marital separation when one spouse seeks to invalidate the agreement. The arguments advanced for the invalidation of a prenuptial agreement can come from credible and non-credible parties. Therefore, each party seeking to invalidate an agreement is subject to a credibility review as long as the agreement bears their signature. Parties who wish to invalidate the agreement can do so if the party believes they did not freely enter into the agreement thus were subject to pressure or duress. Another ground for invalidation is where one party is not aware of their right to seek the advice of legal counsel before signing. In this case, the court will review the totality of the circumstances as well as the education and sophistication of the party to render a decision.