WHAT IS A PREMARITAL AGREEMENT?
A pre-marital agreement (also called a "pre-nuptial" or an "ante-nuptial agreement" in some areas; "prenup" as slang) is a binding legal contract that is entered into by and between competent adults who are considering marriage. This agreement, which is signed prior to the time that the parties are married, allows the parties to set forth and describe their community property rights and financial responsibilities once or after they get married. Stated another way, a pre-marital agreement defines the property rights of each party prior to marriage as those rights concern post-marriage property issues.
Most pre-marital agreements provide that assets or property owned by one of the spouses prior to the marriage shall remain the property of that spouse upon the dissolution of the marriage or divorce. The other spouse to the marriage gives up any rights that he or she had to the assets listed in the pre-marital agreement as belonging solely to the other spouse. A pre-marital agreement can also provide that debts incurred by one spouse before marriage shall remain that spouse's sole responsibility and shall not be the responsibility of the other party to the agreement after the marriage takes place. Pre-marital agreements can also address the right of a party to receive spousal support (i.e. alimony) - however, most state laws, rules and/or regulations provide that this provision can be modified by an order of a court, if the same would result in an inequity to one spouse or the other. Child support is not generally an enforceable provision of a pre-marital agreement.
WHY HAVE A PREMARITAL AGREEMENT?
The purpose of having a pre-marital agreement is to establish the rights to the property owned by the one of the prospective spouses prior to entering into marriage. When the agreement is properly executed, the pre-marital agreement can avoid costly, time consuming and potentially "ugly" legal battles over property ownership issues - since these very issues are addressed in the agreement prior to entering into marriage. This can be important for one (or both) prospective spouse who has accumulated certain property or assets prior to the marriage that they wish to keep even if the marriage fails and a divorce or dissolution takes place.
WHAT IS REQUIRED TO MAKE A PREMARITAL AGREEMENT ENFORCEABLE?
The pre-marital agreement will be enforceable only if signed with the willing consent of both parties to the upcoming marriage. Both parties must be of sound mind (i.e. competent to sign the agreement) and not be under duress, i.e. pressure or force from the other party or some outside source. Also, for the agreement to be valid, each spouse must make full disclosure of all of their assets, property and their financial situation to the other person. If one of the prospective spouses fails or neglects to disclose or list to the other prospective spouse any specific assets or property that he or she owns, and divorce is filed, the person that failed to list or describe those assets or property in the pre-marital agreement could be required to treat that property as community or marital property and that property could, as a result, divided in a divorce proceeding (rather than being retained by the prospective spouse who possessed such asset before the marriage).
In most cases, property acquired by one or both of the spouses after the marriage takes place is considered the community or joint property of both of the spouses and, in a divorce, is subject to being divided by agreement of the spouses or by a court if an agreement by the spouses cannot be reached.
If the marriage that is considered by the prospective spouses never occurs, the pre-marital agreement that they sign shall have no force or effect and it shall be considered void.
IS A PREMARITAL AGREEMENT THE SAME AS A SEPARATION AGREEMENT?
No. A pre-marital agreement is a contract signed before the persons are married. A separation agreement is a contract entered into by spouses after they are married and contemplating a divorce or dissolution. A separation agreement describes how they shall divide their property and allocate certain rights when a divorce or dissolution is ultimately filed.
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