Written By: Cathy McKay
A Prenuptial Agreement is a written contract entered into before marriage that will determine how assets and debts will be divided, in the event there is a death or divorce. The Court will enforce Prenuptial Agreements if there is a death or a divorce as long as the Court finds that the agreement was entered into fairly, giving both parties sufficient time and information to understand how the law may impact the agreement and their fiancé’s assets and income before signing. In addition, the Court will also need to find that the parties’ circumstances have not changed since the agreement was signed in some significant way to make the agreement unenforceable.
Potential clients often ask why they would need a Prenuptial Agreement. The short answer is “they don’t.” Not all people getting married need a Prenuptial Agreement or would even benefit from a Prenuptial Agreement. One of the common reasons a Prenuptial Agreement would be helpful or desired is if one party owns significantly more in assets than the other party before marriage. The party with significant assets may want to protect those assets that he/she feels he/she worked so hard to acquire. This is often the case with marriages later in life or second marriages.
Another reason a Prenuptial Agreement would be helpful or desired is if one or both spouses have children from another marriage. Those parties often want to protect their assets for their children in the event of death or divorce.
A third common reason a Prenuptial Agreement is requested is to protect a family business. If one of the parties works for and has an ownership interest in a family business or will have an ownership interest, the family will often want the party to have a Prenuptial Agreement to protect the family business.
Finally, a Prenuptial Agreement is often requested if a party had been previously divorced and the divorce process was lengthy and difficult. Setting forth the parties’ agreements on dividing assets or debts, or prohibiting alimony, may help to prevent the repeat of such an ugly divorce in the future.
As preparing for marriage can be one of the happiest times in life, parties need to be careful how they approach the conversation about a Prenuptial Agreement. If handled carefully, explaining all of the reasons it is needed or wanted, most parties understand it and will agree to have a Prenuptial Agreement. It can be helpful to work with Collaboratively trained lawyers and maybe even a professional Collaborative team to work through the terms of the agreement together. The Collaborative team can provide the parties with the necessary emotional and financial support, along with a full understanding of the law, while negotiating and discussing the terms of a Prenuptial Agreement. The goal is to preserve the parties’ relationship, not cause damage to the parties’ relationship.