A prenuptial agreement is a document one or both spouses use to protect themselves in case they get a divorce. A prenuptial agreement helps to safeguard financial assets, business interests, and to set the parameters of alimony if a divorce happens.
Part of a valid prenuptial agreement is to ensure all parties receive full disclosure of all the financial assets of all involved. A judge will throw out a prenuptial agreement if the agreement was signed without full knowledge of financial information by both spouses.
To keep a prenuptial agreement in place after a divorce, each spouse should retain respective attorneys to look at the agreement and make sure every line is clear and fair to both parties. No matter if you both sign the agreement, it may not always be binding and valid. The following are some reasons why a prenuptial agreement is invalid.
Poor Timing
A prenuptial agreement has to be complete and signed before the marriage takes place. The marriage is the main consideration for the exchange of the agreement and makes the agreement a contract. If the marriage has already happened, you can no longer consider the marriage a consideration for the prenuptial contract.
You also should not ask your future spouse to sign a prenuptial agreement just days before the marriage. This can look like coercion, which will invalidate a prenuptial agreement in court. A prenuptial agreement is one that is mutually accepted by all parties after a time of discussion and consideration.
Incorrect Information
You have to be forthright in a prenuptial agreement when it comes to assets and debts. If there is no full disclosure, the other party to the marriage is not able to see a full accounting of the financial information. This is an unfairness to the unknowing spouse and can lead to the signing of an agreement without all the pertinent information to make an informed decision.
A judge will invalidate a prenuptial agreement if he or she believes that both parties to the agreement did not have full disclosure. The agreement should list assets and liabilities specifically.
No Written Agreement
A prenuptial agreement has to be in writing. You cannot have an oral prenuptial agreement. The written agreement should include the specific terms of the agreement and should be concise and free of ambiguity. The agreement should also be notarized in front of both spouses to prevent any confusion on the execution of the prenuptial agreement.
Illegal Provisions
The agreement should not have any provisions which can be considered against public policy, unethical, or illegal. For instance, you cannot make any child support arrangements in a prenuptial agreement. The court will determine this to be invalid and can strike down this part of the agreement.
Patent Unfairness
Any agreement that is patently unfair to one party or places one spouse in a much worse position than before the marriage is not valid. The agreement must be fair and as proportional as possible for it to be deemed enforceable. These agreements are considered unconscionable to the point in which the court believes no one would have entered into the agreement otherwise. Any agreement that is also set up under duress or intimidation also can be deemed invalid and thrown out by a judge.
A prenuptial agreement can be a very important part of your asset planning, but you have to enter into the agreement carefully. If you have any questions about prenuptial agreements or need assistance in setting one up, please contact us at Randall A. Wolff & Associates, Ltd. We are happy to help you get your personal effects in order.
