A prenuptial agreement allows an engaged couple to execute, basically, a contract to determine what happens in the event that the marriage ends prematurely, either through a divorce or through the death of one of the parties.
Typically, a prenup is invoked to protect non-marital property, as well as growth on that non-marital property during the marriage. That growth might otherwise be characterized as marital property through the process of being married and having the value increase.
Prenuptial agreements can also address the issue of alimony. They can address the issue of jurisdiction of a divorce. They can address the date that property will be valued and quite often, prenuptial agreements will address cash flow and talk about the engaged couple’s earnings.
Will both spouses have individual bank accounts and anything they purchase from that account be non-marital and have a joint account, where they equally contribute value or dollars and purchase items that are deemed to be marital property.
The types of prenuptial agreements that we’ve been involved in vary widely, including families who own family businesses or come into a marriage with a large amount of investments. We’ve also helped litigants who are older and maybe it’s a second marriage and they want to try to protect and preserve their estate for the sake of their older children.
The law on the issue of prenuptial agreements is fairly straightforward.
Parties are essentially free to contract freely as they will. However, there are two elements that must be satisfied. First and foremost, the document must be executed in a procedurally-fair manner, meaning that each has had a full opportunity to speak with a lawyer, to fully understand what they are signing without some pressure or coercion.
And then the second element involves substantive fairness. The document must be fair on its face and be anticipated to be fair, if and when there should be a divorce as a part of the marriage.