Building a Stronger Future: The Smart Way to Approach a Prenuptial Agreement
Prenuptial agreements (otherwise known as prenups) have become a practical tool for couples of all financial backgrounds. These agreements allow partners to define how their assets, debts, and responsibilities will be handled during and after the marriage. While prenuptial agreements can bring protection and clarity, poorly constructed agreements can do more harm than good. If you’re considering a prenuptial agreement (or just exploring the idea of one), it is important to understand what to do. Here is what you need to know:
1. Hire Separate Legal Counsel
Although retaining one attorney may seem easier, both parties should have their own legal representation during the process. This is a critical step to ensure that the agreement is fair, enforceable, and understood by both parties. Each attorney will advocate for their client’s best interest and help them make informed decisions.
When only one party is represented by an attorney, or when no legal counsel is involved, the agreement can be questioned and is more likely to be challenged later on. Courts may view the prenuptial agreement as imbalanced or executed improperly.
Having separate legal counsel creates clarity throughout the process. Legal language can be confusing, and both parties deserve to know and understand every term they agree to.
2. Start the Conversation Early
One of the most important things you can do when considering a prenuptial agreement is to start the conversation early. This is not an agreement that should be discussed the week before your wedding. These agreements need time, thought, and careful consideration in order to accurately provide fair protection and reflect the true intentions of each party.
Early discussions allow both partners to reflect, consult with independent attorneys, and negotiate the terms without a sense of urgency. It gives both parties an opportunity to fully review and understand the terms they agree to. The goal of a prenuptial agreement is to work collaboratively with one another. Waiting until wedding invitations are sent can make the parties feel ambushed and backed into a corner. Last minute prenuptial agreements are more likely to be challenged in court, especially if a partner did not have time to properly review the agreement with independent legal counsel.
3. Be Fully Transparent with Your Financial Standing
For a prenuptial agreement to be valid, it is essential for both parties to be transparent about their financial standing. Both partners must disclose all income, assets, financial obligations, and debts. If one party omits information, the agreement becomes vulnerable to legal challenges. A court can void the entire prenuptial agreement if it finds that one party failed to disclose relevant financial information. When disclosing your financial standing, honesty is essential and legally required.
4. Ensure Your Agreement is Fair and Enforceable
It is important to craft a prenuptial agreement that will be held up in court if needed. This means that you need to create a document that is fair and legally enforceable under the laws of your state.
If a judge determines that a prenuptial agreement sides heavily in favor of one party or leaves a party with nothing, it could be invalidated (either partially or fully). It does not matter if both parties agreed to the terms at the time, the court could still strike it down if they consider the agreement to be grossly unfair. For example, if one partner agrees to waive all rights of alimony or assets without a full understanding of what they are giving up, said clause could be deemed unenforceable. This is especially true when a partner later becomes financially dependent.
Fairness in a prenuptial agreement is about being reasonable and informed.
Enforceability also depends on the legal procedure. This includes both parties fully disclosing their financial standing, reviewing and understanding the terms of the agreement, voluntarily signing the document, and complying with the state’s standard for executing and drafting the agreement. Tiny missteps can lead courts to question the legitimacy of the agreement.
5. Revisit Your Prenuptial Agreement in the Future
Life changes, and as it does, there is the possibility that the prenuptial agreement will no longer accurately reflect your circumstances 5 to 10 years into the marriage. This is why it is important to revisit your agreement periodically. A prenuptial agreement that made sense at the start of the marriage may no longer be viewed as fair. For example, if one spouse becomes the primary caretaker for the children while the other spouse continues to build their career.
At its core, a prenuptial agreement isn’t about expecting the worst of your marriage, it is about preparing for whatever life may throw at you. It is an important tool for transparency and protection – not just for your assets, but for your relationship. Prenuptial agreements open the door to conversations about financial responsibilities, and can help lay the foundation of your future marriage.
Are you getting married and considering a prenuptial agreement?
Contact us at (978) 637-2048 to schedule a consultation.
