Premarital Agreement
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The Premarital Agreement can change the ownership of property that is acquired by either spouse before the marriage.
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What Is a Prenuptial Agreement in Marriage?
A prenup agreement is a legal document that is signed by future spouses to define the division of assets, debts, and other financial obligations after their divorce or separation. A prenup agreement is also known as a premarital agreement or pre-marriage agreement. This is so because a prenup agreement is signed before the marriage starts. A pre-marriage agreement addresses various aspects of family life within a married couple:
- Assets. A premarital agreement helps to classify the assets of a couple. Some of them may constitute marital property. Others should belong to individual property.
- Debts. A prenup contract may also divide debts between a married couple. For instance, if a loan is used to buy a personal item, parties may agree to consider such a debt an individual debt.
- Bank accounts. Throughout the marriage, a couple may have a number of bank accounts they manage together. A premarital agreement usually defines which accounts are joint and which are individual.
- Children. A prenuptial template may define physical custody over children after divorce. It is possible to address in a prenup agreement rules for parenting style or upbringing.
- Alimony support. Parties may agree on a post-divorce alimony support for a stay at home parent.
- Family Life. A prenuptial template can address how to split the bills, how to define house chores, and many more.
- Personal Relations. Parties may agree to set up financial penalties for a partner who cheats in the marriage. Some prenup samples may also define intimacy relations between a couple.
A prenup agreement only applies to couples who are married. Civil partners or cohabitants cannot use a prenuptial agreement between them.
How Does a Prenuptial Agreement Work?
A prenuptial agreement works as long as your marriage lasts. It also affects how your assets and financial obligations are split up in the event of a divorce. In this chapter we address important queries on how premarital agreements work.
What Does a Prenup Agreement Protect?
A premarital agreement is a powerful legal tool. It is aimed to shield your personal estate and secure your financial position in case of divorce.
- Financial Security for a Stay at Home Parent. Parties may agree that either of them should give up their career to take care of a family. Such a spouse is usually known as a stay at home parent. In that case a marriage contract template should provide financial support for them. A stay at home parent should receive regular payments to cover their living expenses. For example, Lucy and Patrick married ten years ago. Right before the wedding day, they signed a pre-marriage agreement. Their premarital agreement states that in case of a divorce, Lucy will get a monthly alimony. Patrick has always dreamed of a big family with many kids. Lucy left her job in corporate to look after their twins. Last year Patrick filed for a divorce. Now Lucy is entitled to monthly support from Patrick after their divorce is finalized.
- Protection of Individual Family Estate. Usually a prenup contract template separates pre-marriage property from marital property. Pre-marriage property includes all assets that you obtained before getting married. It could be tangible assets (e.g., family home, car, antique) or intangible assets (e.g., family business, stocks, shares, etc.). For example, Jessica and James are drafting a marriage contract template together. Jessica inherited a large mansion from her grandfather, who passed away last year. She wants this asset to be excluded from a couple’s community property. In case of divorce or death, the same mansion should be Jessica’s individual property.
- Financial Security for Children from Previous Marriages. If a spouse has children from a previous marriage, their property rights are important. A spouse may wish that in case of her/his death a full property’s title should be transferred to their children. For example, Anna and Peter decide to marry each other. Anna owns a large mansion, where she lives with her two children from a previous marriage. Anna and Peter discuss a marriage agreement template. Anna insists that in case of her death, a mansion should be transferred to her two children only.
- Protection Against Debts Incurred. A marriage is a long road, when parties may acquire not only property but also debts together. It is vital to discuss well in advance which debts should be included in marital property. For instance, Melissa and Ryan are in love with each other and want to start their family. Ryan is a famous poker player. They both think that discussing a marriage agreement template is not necessary. Five years afterwards, Ryan develops a gaming addiction. He no longer wins but loses money. To keep playing, he takes loans. Banks start chasing after him and claim their rights over their house. In that case a premarital agreement can protect their marital property against debts.
Do Prenuptial Agreements Hold Up in Court?
Before jumping directly to an answer, a terminology needs to be clarified first. A pre-marriage agreement is a legally binding contract once it is signed by both parties. It means that it creates mutual rights and obligations. For a legal document to be enforceable in a court, it should not contain unfair provisions or clauses. In case of a dispute, a court will scrutinize a premarital agreement to check:
- If both parties understand its provisions at the moment of signing,
- If either spouse is put in an unfavorable financial situation,
- If either spouse hides their premarital assets,
- If provisions of a pre-nup agreement correspond to state laws and so on.
A premarital agreement could be enforceable in part or in full by a court. In case of a partial enforceability, a court may recognize part of the provisions and deny the rest. For instance, Mary and John signed a prenup agreement. One of the clauses states that in case of adultery, a default party must pay monetary compensation. Another clause disallows Mary from receiving alimony if she weighs more than 150 pounds. A few years afterwards, John cheats on Mary. Mary requests a monetary compensation, a divorce, and yearly alimony. John says that she will not receive any alimony as she weighs 160 pounds. A court decides to enforce a compensation clause only. The clause about weight and alimony is not enforceable.
Can You Do a Prenuptial Agreement After Marriage?
The most popular question most couples have is, “Can you sign a prenuptial agreement after marriage?” A prenup agreements are usually confused with postnuptial agreements. A pre-marriage agreement is signed before the marriage is officially registered. A postnuptial agreement is signed in the course of a married life. Another distinctive feature is the legal validity of a document. A pre-marriage contract becomes valid on the date of a marriage’s registration. If a couple signs a pre-nup and does not get married, a pre-marriage contract never becomes valid. A prenuptial agreement after marriage becomes valid on the date of its signing. Parties may also agree on any other date it becomes valid. Postnuptial agreements are mainly focused on community property. A community property is a property that is acquired by either spouse during their marriage. Parties may wish to define how it should be divided in case of divorce.
How Long Do Prenuptial Agreements Last?
A prenuptial agreement does not have a default expiration date. Even if the marriage ends, it does not mean that the pre-marriage contract expires. A pre-marriage contract plays an essential role in a divorce process. It helps to divide assets, debts incurred, and other liabilities between a couple. As a result, it remains effective throughout the duration of a divorce process. It is not common to set up an end date in a pre-marriage contract sample. As a rule of thumb, it should last until it is executed in full. In other words, until a purpose for which a contract has been created is finalized. At the same time, parties may end a pre-marriage contract at any time. In that case they have to sign a written addendum for termination. Once it is signed by both parties, a pre-marriage contract is considered terminated.
What are the advantages of premarital agreements?
Most people think that a pre-marriage contract is for wealthy individuals. But this is not the case. As the practice shows, there are lots of benefits of a prenuptial agreement.
- Reducing legal fees. Signing a pre-marriage agreement may significantly save you costs during the divorce process. The average cost of a prenup agreement template is a hundred times lower than the attorney’s cost.
- Clear Expectations. One of the benefits of a prenuptial agreement is clear expectations for everyone. Both are aware of potential consequences of their actions. For instance, Peter and Jessica got married last year. They signed a pre-marriage agreement as well. According to it, Jessica gets half of Peter’s assets once he cheats on her. From now on, Peter is afraid to have an affair, as he is aware of what could happen next.
- Wealth Preservation. If the parties who plan to get married are financially unequal, a prenup agreement can help. It helps to shield finances and assets from marital property for either spouse. In the case of divorce, those assets won’t be shared between ex-spouses. For instance, Amanda has a family business in real estate. It is a company that owns hundreds of commercial premises across the United States. Amanda meets Robert and wants to marry him. She shows Robert a prenuptial agreement example. In case of divorce, her family business is excluded from marital property.
- Setting up Joint Financial Goals. A prenuptial agreement template allows parties to reflect on their future financial goals. Which debts should they take on and which should they avoid? Should individual debts be included in marital property? For instance, Sarah and Bill plan to start a family. They both agree that a mortgage debt should be split equally in case of a divorce. Sarah insists that loans to buy personal things should be considered a debt of a person who takes them.
How to Write a Prenuptial Agreement?
To become valid, a pre-nuptial agreement template should have essential elements. If you plan to create a document by yourself and look for some tips on how to do a prenuptial agreement, this chapter is for you.
Define premarital assets
Each spouse should list all the assets they have. All those assets will then be considered an individual property in case of divorce. As a rule, an individual property is not divided during the divorce between a couple. You have to list both assets that you own and where you have an interest. Those assets may include:
- Stocks and shares;
- Real estate, lease rights, servitudes, etc.;
- Intellectual Property Rights (e.g., trademarks, patents, know-how, etc.);
- Retirement Savings
- Digital assets (e.g., cryptocurrency, social media accounts, domain names, etc.);
- Movable assets (e.g., boats, vehicles, furniture, etc.).
The suggested list of assets can be expanded by any other asset a party wishes to include. It is advisable to list all possible details and descriptions related to assets. Usually, a prenup agreement sample has a separate annex. This is where all the assets should be outlined. If you omit inclusion of certain assets, it may have negative consequences. In the event of a divorce, such an asset might be included in marital property by default. As a result, a judge may rule to divide it between exes.
Define premarital debts and liabilities
Future spouses should reveal all their financial obligations before they sign a prenup agreement. A spouse’s financial liabilities may have a different nature:
- Mortgage payments and bank loans (e.g., car leasing or student loans);
- Credit card payments and balances;
- Any other personal debts and financial obligations.
All financial liabilities and debts that are mentioned in a prenuptial agreement sample belong to a spouse who incurred them. In case of a divorce, they are not considered as joint liabilities. Discuss a Property and Debt Division after Divorce Parties are free to decide how their marital property should be divided in the event of a divorce. A marriage contract sample can provide various options:
- Division of all marital property and debts 50/50;
- Certain assets and debts are transferred in full to either of the spouses, and the rest to the other spouse;
- Certain assets are transferred in full to either of the spouses. The other receives a monetary compensation in its turn.
Parties should bear in mind that a division of property should be in favor of one person. If it is so, a court may not enforce such a prenuptial agreement at all.
Discuss Alimony Support
One of the benefits of a prenup agreement is discussing all financial matters in advance. Among them is an amount of a spouse’s alimony support. Check first your state laws to know more about regulation of alimony support. Remember that provisions of your prenup cannot contradict state laws. You and your partner may wish to consider here the following aspects:
- Amount of regular support (it could be a fixed amount or a percentage from a spouse’s income).
- Frequency of payments (one-off payment, monthly, quarterly, or yearly payments).
- Certain additional conditions. A pre-marriage contract may establish dependency of alimony on the number of years in marriage. An amount of alimony may also depend on the number of children.
- Duration of regular payments. Some pre-nup agreements may set up a few years, while others may provide an indefinite period of time.
Agree on Child Custody
Another purpose of prenuptial agreement is to define the custody of their children. Please note that a prenuptial agreement can only define physical custody. In other words, with which parent should children live after divorce? A pre-marriage contract cannot define child alimony or child support. This should be addressed in a separate child support agreement.
How Much Does a Prenuptial Agreement Cost?
If you are looking for a prenup agreement template, you can start your search on the Internet. Lots of platforms offer prenuptial agreement samples for free. Though we do not recommend using free legal templates. They might not suit your particular case. And they are not customized for your circumstances. Some online platforms, like Faster Draft, offer customized pre-marriage agreement templates. You can also ask your attorney to draft a prenuptial agreement for you. It, however, includes paying legal fees for drafting and an attorney’s consultation.
How to Get a Prenuptial Agreement without Lawyer?
There are two possible ways on how to get a prenuptial agreement without a lawyer.
- Option No. 1. The first way is to draft a document by yourself. We do not recommend choosing that way if you are not a lawyer. Even to create a basic prenuptial agreement, you have to put in a lot of effort. You can miss including important clauses in your template. Or you can also insert provisions that may contradict each other. All that may lead to a document not being valid.
- Option No. 2. The second way is to create a customized document. In that case you only have to answer a few questions, and a document’s template will be generated in minutes. Any party before or during the marriage may create such a template.
Get Your Prenup Contract Template Online at Faster Draft
If you are wondering how to do a prenuptial agreement at Faster Draft, follow these simple rules:
- Press the button “Create Document” and start filling in the questionnaire.
- Try to answer all questions in the questionnaire. It will help to customize your template better. If you do not know an answer, press “Skip.”
- Select the document’s format—Word or PDF.
- Proceed to payment and get your template.
- Consult an attorney and accountant before signing.
- Sign a prenuptial template.
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Frequently Asked Questions (FAQ)
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1. Do prenuptial agreements work in the United States?
Yes. Prenuptial agreements are absolutely legal. Federal or state law does not restrict the application of prenuptial agreements. A pre-nup agreement can only work when it is legally binding. A legally binding pre-nup agreement:
- Does not contain unfair clauses;
- Does not contradict the state laws; and
- Signed by both parties.
If both conditions are met, a pre-nup agreement will achieve its purpose.
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2. Do prenuptial agreements expire once the divorce is finalized?
It depends on the purpose of prenuptial agreement. If a purpose is to divide marital property, then an agreement expires after the divorce ends. However, a pre-nup agreement may have provisions related to post-divorce. Among them is a payment of alimony support after divorce. In that particular situation, a pre-nup agreement will last as long as alimony support is paid.
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3. Should I get a prenuptial agreement with my boyfriend?
A pre-marriage contract could be signed only by a couple who plans to get married. A prenuptial or pre-marriage contract cannot be enforced for civil or domestic partners.
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