Prenuptial Agreement FAQ - United States

Prenuptial Agreement FAQ - United States Prenuptial Agreement FAQ - United States GeneralShould I get a prenup?No one can tell you whether a prenuptial agreement is right for you and your situation. People can give you sound advice based on years of experience, but ultimately the decision is up to you and your future spouse. That said, you might want to consider a prenup if one or more of the following is true: You own or co-own a business or businesses. You may receive a large inheritance. You expect to see a large increase in income. One of you is much wealthier than the other. One of you plans to support the other financially through post-secondary education. You have or will have a license or degree in a lucrative profession. You own your own practice. You have valuable property, such as real estate, stocks, or savings. You have parents or other loved ones who need a secure financial future. What is discussed in a prenuptial agreement?Usually a prenuptial agreement will discuss the following topics: division and ownership of property; division and ownership of debts; spousal support; and inheritance of property. If I create a prenuptial agreement, will I avoid litigation in the event of a divorce?A successful prenup can help speed up litigation or possibly even avoid it altogether in the event of a divorce. However, there is no guarantee that a prenup will avoid litigation at divorce. Are there any limitations on who can create and sign a prenuptial agreement?No. Generally, any couple contemplating marriage can enter into a prenuptial agreement. What should I not include in a prenup?A prenuptial agreement cannot be used to determine issues regarding child custody, child visitation rights, or child support payments. Please do not include any provisions that deal with such, as the courts will always make a decision based on the best interests of the child(ren) at the time of divorce. You should also avoid including any provisions that do not deal with property or finances. For example, you should avoid including a clause stating that your spouse must do the laundry twice a week. These types of demands not binding in court. If you wish to list personal matters, such as the division of chores, rules for raising children, etc., you should do so in a separate agreement (with the knowledge that such an agreement is not legally binding) so as not to invalidate your prenuptial agreement. What is the difference between a prenuptial agreement and a cohabitation agreement?A prenuptial agreement is an agreement specifically for couples who intend to get married while a cohabitation agreement is for couples (either heterosexual or same-sex) who intend to live together. When should we sign our prenuptial agreement?You should sign your prenuptial agreement well in advance of your marriage ceremony (its recommended not less than 30 days before the wedding). Should the agreement later be challenged, the court will be less likely to question whether one of the parties entered into the agreement under duress, coercion, or undue influence. Signing the document in advance ensures that both parties have had sufficient time to consider the agreement before getting married. Should all finances be disclosed prior to entering a prenuptial agreement?Yes, it is essential that each party discloses his/her finances to the other (including all income, assets and debts). The prenuptial agreement can be challenged in court if it later revealed that one of the parties did not disclose or hid assets at the time the agreement was created. In the interests of full disclosure, it is smart practice to attach financial statements detailing the financial situation of each party. What requirements must be met for a prenuptial agreement to be held valid and legally enforceable?Usually, for a prenuptial agreement to be held valid and enforceable by a court it must comply with the following requirements: The agreement must be in writing, signed and witnessed. Both parties must have provided complete disclosure of all assets liabilities. If parties have legal representation, each party must retain their own lawyer to ensure they receive independent legal advice. There cannot be any evidence of duress, coercion, or undue influence. Provisions between the parties must be legally permissible. Party InformationWhat is a Referred Name?A referred name is a name that a party will be referred to as throughout the agreement. In most cases, the referred name will be the partys given name (i.e. Alexander) or a shortened version (i.e. Alex). What does independent legal advice mean?Independent legal advice refers to each party having a different lawyer explain to them the terms of the agreement and advising them of what is in their best interests. While its not usually necessary for parties to a prenuptial agreement to have independent lawyers, it can act as an additional safeguard. Courts will be more willing to uphold the terms of a prenuptial agreement if it is clear that both parties had their own lawyer and understood the agreement they were entering. PropertyWhat is property?Property is anything that is owned. Property is often divided into two types: real property which is any interest in land or real estate and personal property (sometimes referred to as personalty) which includes everything else. Savings accounts, stocks and bonds, real estate, vehicles, valuable antiques these are all examples of property. How can I list property?There are two ways to list both Separate Property and Shared Property: Select Yes, as specified below. This option allows you to list up to ten items of property per party. This option is convenient if you have not already created a list of property and each party has 10 or fewer items to claim. Select Yes, as specified in an attached list and attach a list of property to your prenuptial agreement. This option is best if you have already created a detailed list of property or if a party has more than 10 items to claim. How should I list property?When listing an item of property, your goal should be to list enough information about the item so that there is no doubt as to which item you are describing. As a general rule, the more information you provide about an item of property, the easier it will be to identify in the future. The following are suggestions for listing different types of property. Vehicles Year, Make, Model, Vehicle Identification Number (VIN). VIN is optional, but recommended. Example: 2006 Ford F-150 Extended Cab, 111 Real Estate Property Type of property, address (Street Address, City, State, ZIP). Example: Townhouse, 111 Pine Street, Los Angeles, California, 11111 Accounts, Funds, etc. Type of account, institution, account number. Example: Savings Account, XYZ Bank, 111 Possessions List enough information so that there will be no questions as to which item you are describing. When listing a collection, name at least the most important items in the collection. If you have an art collection with over 100 pieces, it might be difficult and/or impractical to list them all. However, you should include the description of all pieces that are particularly valuable or meaningful to you. Examples: Diamond earrings from ABC Jewelers, 0.5 ct. Bedroom furniture, including: king sized bed, king sized mattress, two night tables, and two lamps. Art collection, including: Sunset, original painting by Artist X; Apples, print by Artist Y; all other paintings, prints, and sculptures. How should I title my lists?You should title each list as a schedule. For instance, if your first list is a description of all your assets, you may want to title the list as Schedule A and underneath this heading provide the subheading Summary of Assets. What is Separate Property?Separate property is property that will not be divided between the parties in the event of a breakup. In other words, there will be no question as to the legal ownership of the property or whether the other party has any entitlement to it. What is Shared Property?Shared property is property that the two parties have either purchased together or have agreed to consider as belonging to both parties. How should Shared Property be assessed in the event of a separation?There are many different ways that Shared Property can be assessed in the event of a separation. LawDepots prenuptial agreement allows you to select the two most common ways of assessing Shared Property or create your own. The two common answers you can select are Each party will own 50% of the property and Ownership will be based on the financial contribution of each party. To create your own clause, select Other and enter your preferred method for assessing Shared Property in a complete sentence or paragraph. The following is an example of the kind of clause you could create: Alex will own 80% of the art collection. Mary will own for 20% of the art collection. Each party will own 50% of all other Shared Property. What is a Transfer of Property?A transfer of property occurs when one party gives or sells ownership of a piece of property to another party. LawDepots prenuptial agreement includes an optional clause stating that the transfer of present or future property between the two parties must be evidenced in writing. If this clause was selected and Alex wanted to give ownership of his vehicle to Mary, the two would need a written contract as evidence of the transaction. Although this method requires more paperwork, it does provide more protection, as it helps to establish changes in the ownership of property between the parties. DebtsWhat are Debts?Debts are typically obligations to pay money. How can I list Debts?There are two ways to list both Separate Debts and Shared Debts: Select Yes, as specified below. This option allows you to list up to ten items of debt per party. This option is convenient if you have not already created a list of debt and each party has 10 or fewer items to claim. Select Yes, as specified in an attached list and attach a list of debts to your prenuptial agreement. This option is best if you have already created a detailed list of debts or if a party has more than 10 items to claim. How should I title my lists?You should title each list as a schedule. For instance, if your first list is a description of all your debts, you may want to title the list as Schedule A and underneath this heading provide the subheading Summary of Debts. What are Separate Debts?Separate debts are debts that fall upon the responsibility of one party and thus are not divided in the event of a breakup. Responsibility for the payment of a separate debt will be solely on the party who has either incurred the debt or agreed to take responsibility for the debt. What are Shared Debts?Shared Debts are debts that both parties are responsible for. Shared Debts will be divided in the event of a breakup. Responsibility for the repayment of a Shared Debt will fall on both parties, although not always in an equal amount. The amount that each party must contribute to the repayment of a shared debt depends on how shared debts are assessed in the event of a breakup. How should Shared Debts be assessed in the event of a separation?There are many different ways that Shared Debts can be assessed in the event of a breakup. LawDepots prenuptial agreement allows you to select the two most common ways of assessing debts or create your own. The two common answers you can select are Each party will be responsible for 50% of the debt and Responsibility will be based on the financial contribution of each party. To create your own clause, select Other and enter your preferred method for assessing debt in a complete sentence or paragraph. The following is an example of the kind of clause you could create: Alex will be responsible for 75% of all Shared Debts related to renovation costs. Mary will be responsible for 25% of all Shared Debts related to renovation costs. Each party will be responsible for 50% of all Shared Debts that are not related to renovation costs. ChildrenWhat are Dependent Children?Dependent children are natural or adopted children that still rely on their parent(s) for financial support. Usually a child is considered a dependent until the age of 18. However, an older child can still be considered a dependent if the child is enrolled in college or in other special circumstances. SupportCan a party be entitled to more than one type of support?Yes, a party can be entitled to more than one type of support. For example, your prenup could dictate that, in the event of a divorce, your future spouse will receive a lump sum payment as well as fixed monthly payments. What is a Lump Sum Payment?A lump sum payment is a one-time payment of money, as opposed to a series of recurring payments. Will the details of the Support section be upheld?Some states do not allow prenups to dictate what support is given in the event of a separation or divorce. If you are unsure of the laws of your state regarding this manner, please contact a local lawyer. Also note that a judge can revoke a prenuptial agreement if its terms will leave one party destitute or if it is otherwise considered one-sided or unfair, even if both parties agreed to the terms. Additional ClausesWhat are Additional Clauses?The Additional Clauses feature allows you to add your own clauses to cover any issues that LawDepots standard prenuptial agreement does not cover. When writing your own clause, be clear and concise, and write it in a complete sentence or paragraph. Avoid creating clauses that do not deal with property or finances. For example, you should avoid including a clause stating that your spouse must do the laundry twice a week. Not only are these types of demands not binding in court, they might even cause a judge to revoke the entire agreement. OtherWhich State do I list for Governing Law?For the Governing Law, you should list the state that you primarily reside in or the state that you plan to primarily reside in for the majority of the marriage, regardless of where the wedding is being held. Signing Details Are witnesses required?Witness requirements vary from state to state. For example, Georgia requires that you sign your prenup in front of two witnesses. If you are unsure of the legal requirements in your state, it is best to select two witnesses. Having more witnesses than required will not affect the validity of the contract. What is an Affidavit of Execution?An Affidavit of execution is a sworn statement by a witness to the signing of a document in which the witness confirms that the proper execution of that document occurred. What is a Notary Public?A Notary Public is a state-appointed official who is authorized to authenticate certain legal documents, such as declarations, acknowledgments, deeds, mortgages, and other contracts. What is a Certificate of Independent Legal Advice?A certificate of Independent Legal Advice is a document that states that a party has received legal advice on a proposed matter, from an independent lawyer who is not associated with the other party. In order for the prenupital agreement to be enforceable, some states require that both parties obtain independent legal advice and that certificates of independent legal advice be completed. For example, California Family Code section 1612(c) provides that spousal support waivers absolutely require that the party waiving the right was represented by independent legal counsel at the time the agreement was entered into. So if a lawyer has not advised the party and signed off on the prenuptial agreement (completed the certificate of independent legal advice), the waiver is not enforceable. Can I restrict or waive child support in a prenuptial agreement?Generally, you can not adversely affect or waive any rights of a child to support in a prenuptial agreement. The parties can set their intentions in the prenuptial agreement which the courts can consider, but they are not bound by such provisions as the needs of the children are paramount. Do I need to file my prenuptial agreement anywhere?No, you do not need to file your prenuptial agreement anywhere. Just make sure that you keep a signed copy or copies in a safe, secure place.