I do. . . . But do I need a Premarital Agreement first?
It is such a wonderful thing when two people meet, fall in love, and want to spend the rest of their lives together. However, things are much different today than they were 20 to 30 years ago. People are marrying at a later age, perhaps after they have completed their education, found a job in their profession, or have reached some form of financial stability. Divorce is a much easier process today and the unfortunate reality is that nearly half of all marriages end in divorce. The divorce rate for second marriages is even higher. Subsequent marriages raise the issues of children from former marriages, and the division or enjoyment of wealth, property, assets, etc. With the changing of the times and of the family structure comes the issue of when is a premarital agreement needed.
Each relationship is unique and must be looked at individually to determine whether a premarital agreement is appropriate. Here are some examples of couples who may benefit from premarital agreements:
John and Mary have been dating for some time and are now making plans for their wedding. John is a widower and would like to ensure that the money he inherited from his deceased wife goes to his children. Mary has children from a previous marriage and John is concerned that Mary and her children may have some right to his inheritance once they marry. John wants to make sure that his children do not have to share any of their inheritance with his future spouse and stepchildren.
Another example is Peter and Lisa.
Lisa owns a successful company and has worked hard to create a successful business. She does not want to lose her business, or any portion of her business, should her and Peter's anticipated marriage later end in divorce.
A premarital agreement could address the concerns of these couples and protect John's inheritance and Lisa's business interest. These are just two examples of many relationships and situations where a premarital agreement would be beneficial.
A premarital agreement, also known as an "anti-nuptial" or "prenuptial" agreement is an agreement between prospective spouses made in contemplation of marriage. The purpose of a premarital agreement is to protect the assets, property, etc. of an individual. Once married, spouses by law, have some entitlement or right to each other's property, assets, etc. Prospective spouses can enter into a premarital agreement to prevent this from happening. To be enforceable, the premarital agreement must be signed by both prospective spouses. The premarital agreement does not become effective until the parties are legally married. Premarital agreements may address the following concerns:
- The rights of each prospective spouse to any property that either or both of them acquire before, during or after the marriage.
- The rights of each prospective spouse to buy, sell, transfer, mortgage, dispose of, use or otherwise control the property of either or both spouse.
- The disposition of property upon the separation, divorce or death, or the occurrence of any other specific event.
- The ownership rights to any benefits, investments, profits, pensions, etc.
- The modification or elimination of spousal support.
A premarital agreement may also include any other personal rights or obligations, so long as they do not violate any law or public policy. The right of a child to support may not be adversely affected by a premarital agreement.
It is important that prospective spouses inform each other as soon as possible of their desire for a premarital agreement. Voluntarily entering into and agreeing to a premarital agreement is very important. A premarital agreement that is "sprung" on a prospective spouse right before the wedding will probably not be enforceable because of the appearance of inducement or a forced acceptance of the agreement. It is also very important that both prospective spouses fully and accurately disclose all of their property, assets or financial obligations to one another before signing the premarital agreement. Legal representation is often the best evidence that a premarital agreement was signed with full disclosure of all property, assets or financial obligations and that the agreement was signed voluntarily.
Michelle Donarski is an attorney with the law firm of Anderson & Bottrell, State Bank Center, Suite 302, 3100 13th Avenue SW, Fargo, ND 58103 (701) 235-3300.