Saying “I Do” to Prenuptial Agreements
Prenuptial agreements are highly specific, binding contracts, and they come with all the confusion that contracts usually bring. Luckily, the basics are pretty straightforward, and your lawyer can help you with the nitty-gritty. This article lists some things you may want to know, just to make life easier for yourself and your lawyer when you start writing the agreement.
The following information was adapted (in some instances, nearly word-for-word) from Kentucky Divorce, August 2018 Update, Chapter 18, Section 10: “Effect of prenuptial agreements.”
What can you actually do with a prenuptial agreement? Well, let’s first look at what happens if you don’t have one. A Kentucky law, KRS 403.190, governs what rights a person gains or loses upon being married. Basically, the law decides for you which rights you get and which rights you don’t. A prenuptial agreement takes that power away from the law and puts it in your hands; you can decide for yourselves what rights you’re going to have. This can include decisions such as who’s going to own what property, or whether one party will support another even after the marriage ends. However, there are a few specific exceptions to this rule. Firstly, prenuptial agreements can’t make any decisions about child support, child custody, or visitation. Secondly, any property you have individually before the marriage remains separate, unless you specify in the agreement that you want it to become joint property.
You’re going to want to make sure the agreement you write will actually be enforced by a court, if it comes to divorce. For that to happen:
- You must each fully disclose your assets and obligations (i.e., all of the stuff you have individually, prior to the marriage, including any debts). You’ll need to be extremely specific about your premarital property, describing it well enough to make it immediately identifiable. You should each have your own attorney, and should look over each other’s summaries of their assets and obligations. It’s also a good idea to attach the detailed summaries to the prenuptial agreement, to keep everything organized.
- The agreement must not be unconscionable at the time enforcement is sought. In other words, if enforcing the agreement as-written would (pardon my language) royally screw over one party, a court will not enforce it.
This marks the end of the information provided by “Effect of prenuptial agreements.” Next comes information from “Planning and Drafting Premarital Agreements,” by Stephanie B. Casteel, in Practical Tax Law, Volume 20, Number 1. This, like the above, is taken nearly word-for-word in some instances.
There are some other things you might want to include in your prenuptial agreement. These aren’t strictly necessary, but they can save you a lot of hassle in the long run.
First, if one party is from another state or country (especially if they still have property there), you may want to ask your attorney about including something called a “choice of law” provision. This kind of provision picks one state’s laws and says that the agreement follows those laws specifically. Then, if you end up in divorce court, you won’t get caught between “Kentucky law says this” and “Illinois law says that.” Choice of law provisions aren’t always enforced by a court, but including one doesn’t hurt.
Second, when you sign the agreement is also important. One commentator has suggested that, while twelve to sixteen weeks prior to the wedding would be optimum, two to three weeks could suffice. If you had the idea for a prenuptial agreement fairly late in the process, you can assure a court that you each knew what you were getting into by stating, in the agreement itself, that you know it happened in a short period of time, and you don’t think that affected your decision to sign the agreement.
When deciding whether the time allowed seems reasonable, a court will also base part of its judgments on who you’re marrying. The obvious reason is for people who marry celebrities, but there are other occasions where it might come up; for example, if your spouse is a lawyer who writes prenuptial agreements regularly, a court will probably trust that they knew what they were doing. You can convince a court that the “who” doesn’t matter as much if you make sure each spouse-to-be has a competent, thorough lawyer during the process.
Third, a prenuptial agreement should include “recitals.” Writing that you knew you were signing the agreement with limited time is one kind of recital. Recitals can also include acknowledgements that you’re each very different in wealth, or that one party intends to fully financially support the marriage. Some recitals that you definitely want to include in the agreement are:
(a) you each signed the agreement voluntarily;
(b) you were each represented by different lawyers;
(c) you each received the other’s detailed summary of their assets and obligations;
(d) you each waive any further financial disclosure of the other party (i.e., you agree that you don’t need to see any more of their financial information); and
(e) you have each been advised about what rights (if any) you’re giving up by signing this agreement.
This marks the end of the information provided by “Planning and Drafting Premarital Agreements.”
Your lawyer should make sure that you have everything you need, but you’re sure to be golden if you ask whether any of these should apply to your particular agreement. Now go forth, and wow your attorney with your knowledge of prenuptial agreements!
Written by Kristi Street