PRE-NUPTIAL AND POST-NUPTIAL AGREEMENTS

Prenuptial Agreements -- also known as "premarital" or "antenuptial" agreements -- are legal contracts executed by prospective spouses that establish what happens to their income, assets, and debts if the marriage ends in divorce, separation or death.

Postnuptial Agreements are very similar to the "prenuptial" variety described above, but are entered into by the parties after the marriage ceremony.  In fact, a postnuptial agreement can be put in place at any time following the wedding date.

For additional information on how a post-nuptial agreement might benefit you, see the video of an ABC News story on "Postnups" featuring the former President of the American Academy of Matrimonial Lawyers, at the following external link:

mms://media.internet4associations.com/aaml/postnuptial_World_News_Now.wmv
(April 15, 2007, ABC News)

As this news story points out, a postnuptial agreement can be critical for happily married couples who wish to protect their assets, provide for children from previous marriages, etc.

What's in a Pre-Nuptial Agreement?

Many couples contemplating marriage -- especially a second or subsequent marriage -- create prenuptial agreements outlining the rights and responsibilities of each partner.

Prenuptial agreements can set forth the rules for virtually every aspect of a marriage, including deciding who is responsible for household bills and expenses. The agreement should stipulate inheritance rights of children from a previous marriage and enable each spouse to waive the right to inherit from the other's estate.

As long as the agreement is voluntary and each spouse is aware of the extent of the other's property, written prenuptial agreements are legally enforceable. However, if one spouse fails to disclose assets, debts, or liabilities, and the other spouse's decision to sign a prenuptial agreement is not well-informed, a court will not enforce it.

Who Needs a Prenuptial Agreement? You should consider a prenuptial agreement if either or both of you:

• Have children or grandchildren from a previous marriage
• Own a business or are a partner in a business, law firm, or medical practice
• Possess significant assets or property
• Have much more money than your prospective spouse--over twice as much is the rule of thumb
• Plan to support the other through college or a professional school
• Have significant debt

Should We Make a Prenuptial Agreement?

The Pros:

• Establishes ground rules for marriage
• Divides assets fairly if the marriage is dissolved
• Preserves inheritance rights of children from previous marriages

The Cons:

• Not the most romantic way to begin marriage
• Possibly expensive -- lawyers can charge $500-$3,000 to write them
• Validity may be challenged; courts may overturn

Uniform Pre-Marital Agreement Act

Many states have adopted some form of the Uniform Pre-Marital Agreement Act, a set of guidelines for dealing with management of property; disposition of property after separation, divorce, or death; alimony; wills; and life insurance beneficiaries. The laws in states that have not adopted the Act are generally very similar to the Act. No state permits couples to include binding provisions about child support payments.

To Make an Airtight Prenuptial Agreement . . .

• Each of you must have your own lawyer
• Each of you must reveal all details about your assets and liabilities
• Each of you must sign willingly and voluntarily
• Do not sign the agreement at the last minute
• Sign the agreement in front of a notary and/or videotape the signing ceremony

Will a Prenuptial Agreement take the romance out of our engagement?

Question: I am engaged to be married. I have a son by a previous marriage and a piece of rental real estate from my divorce settlement. I would like the income from the property to be used for my son's college education and to eventually go to him when I die. Should we sign a pre-nuptial agreement?

There are some who believe that pre-nuptial agreements require the parties to negotiate their divorce before the wedding vows are exchanged. Obviously, if that is one's intention from the outset, you may want to reconsider marriage.

Even so, pre-nuptial agreements are not necessarily harbingers of divorce. I do not believe that they are necessary in most marriages, but in many instances these documents are prudent planning and can offer protection and security to both spouses.

In the above situation, it would appear your purpose is to protect your son's best interest and to provide for his future. I suspect you realize that, in the event of your death, your new husband will have no legal obligation to provide for his stepson and you want to make sure the child's long- and short-term needs are met.

I cannot give specific legal advice in response to such a general question and strongly urge you to discuss this matter with competent legal counsel. Your attorney likely will suggest that a trust be set up to hold ownership of the real estate, for the benefit of your child until he becomes an adult.

Depending on individual circumstances, a "pre-nup" could be extremely important in establishing the parties' agreement about ownership of assets, contributions to the marriage, responsibility for debts, etc. These agreements are extremely flexible and can be crafted to fit most any circumstances. However, they can only be enforced if they are fair when the time comes to enforce them and if both parties were completely honest in making disclosures about their assets and liabilities. Further, it's important that the parties have separate legal counsel in negotiating the agreement.

If one of the parties owns a business before the marriage, the agreement can dictate what will become of the enterprise after the marriage, whether the other partner is expected to participate in the operation of the business, what compensation the parties can expect from the business, etc.

If one of the parties is agreeing to give up his/her job and relocate after the marriage, a pre-nuptial agreement can include specifics about what that partner can expect to receive in the event of a divorce with respect to compensation for lost career opportunities and so forth.

I strongly recommend you seek competent legal, tax and accounting advice before entering into any agreement which may affect your present or future rights and obligations. The appellate court's emphasis is always on whether there was full disclosure and whether the document was fair.

The American Academy of Matrimonial Lawyers' website at www.aaml.org offers a great deal of useful advice on this and many related Family Law subjects, including:

Keeping Separate Property Separate Without a Prenuptial

When Your Elder Clients Marry: Prenuptial Agreements and Other Considerations

Tax Clauses You Can't Live Without

To Have and To Hold