Prenuptial Agreements are a Way to Take care of Problems Before they Happen.
Wedding bells are ringing and the date of the big event is fast approaching. The last thing the happy couple wants to think about is how they would divide their assets in the event of a divorce.
People do not marry with intention of divorcing in mind. Keeping in mind that 50% of marriages end in divorce, a prenuptial agreement will protect your assets in the event that a divorce may occur. There are many big mistakes that people make when trying up prenuptial agreements. Because it is so disconcerting to consider the possibility of divorce while anticipating a wedding, people tend to put off hiring a lawyer until the last minute. That is the first big mistake! Following is a list of the four important rules and preparing a prenuptial agreement:
1) the agreement cannot be signed under duress. That means not only no threats about canceling the wedding if the agreement is not signed, but it also means that each party has to have enough time to consider the substantial rights that they may be preserving or giving up. A prenuptial agreement should never be signed within days before the wedding, as that is also duress. It is best to have the agreement prepared and ready for signing no less than one month before the wedding date. The further away from the wedding date the document is signed, the better.
2) Each party must have independent counsel. That means the same lawyer cannot represent both the prospective bride and prospective groom in counseling regarding the prenuptial agreement. The bride and groom each must have their own attorneys to advise them about the contents of the agreement and whether it is advisable to sign the document or not.
3) The prenuptial agreement must contain a full and complete disclosure of the assets and liabilities of each party. There should be one disclosure sheet for the bride and one disclosure sheet for the groom. It is common to see these disclosure sheets as addendum or attachments to the body of the prenuptial agreement. Without a full disclosure, the agreement could later be held invalid if presented in court during the divorce proceedings.
4) The agreement must have what is known in legal terms as “consideration”. This means there has to be a benefit for the bargain. Therefore, if either the wife or groom is agreeing to give up a right to the other parties assets, there must be some benefit to giving up that right. If each has assets they want to retain and protect in the event of a divorce, then the agreement may be equal and the benefit for the bargain is that each party is giving up something in exchange for the right to retain something. In the case where one party has no assets and the other has significant assets, then the benefit to the party giving up their right to the assets should include a benefit such as a buyout of a certain monetary amount. If one party is being asked to give up the right to claim alimony, then there should be some property or lump sum settlement being offered in exchange as the benefit. These are only some examples of the requirement of having consideration in a prenuptial agreement.
It is wise for parties contemplating marriage to meet with experienced attorneys who can prepare and review a prenuptial agreement. Planning ahead is but one tool that will be helpful in avoiding future acrimonious problems.