Generally speaking, all marriages end – some by divorce or other judicial action; all others – with death of one of the spouses. Prenuptial (or antenuptial) agreements are often a wise idea for specifically those two reasons: determination of property and alimony rights in the event of a divorce and a waiver of spousal estate share. These agreements may prove to be especially important when one enters second (or subsequent) marriage where the parties want to protect the inheritance rights of their children from prior marriages. Parents of the bride or groom are also oftentimes the driving force behind the agreements, seeking to ensure that their own inheritance stays within the family. Thus, the prenups are often estate planning devices and, in that capacity, they can be more easily presented by the proponent to the other party.
Definition of Prenuptial Agreements
Prenuptial agreements are contracts that are entered into by two individuals who intend to get married and only valid if the marriage actually occurs. These agreements dictate the property and alimony rights of both parties in the event that the marriage ends.
When Prenuptial Agreements are Used
Prenuptial agreements are most frequently used in situations where one (or both) of the parties seeks to protect any type of asset or property out of the marital estate; when a significant difference exists between each party’s income and financial assets; when one or both parties seek to protect the rights of their children from prior relationships; or when one party has the possibility of earning a sizable amount of assets in the future including cases of inheritance and when the individual’s earning capacity is expected to increase.
Time IS of the Essence
Parties should understand that signing a prenuptial agreement is best done sooner rather than later. The closer that a prenuptial agreement is signed to a wedding date, the greater the likelihood that a court will find the agreement is not valid because it would look awfully like one of the parties was forced (pressured) to sign the agreement at the threat of either sign the agreement or not get married. It is worth noting, however, than the timing of signing alone is not enough to invalidate agreement; if sufficient negotiations took place over time, the agreement can still be valid.
Requirements for a Valid Prenuptial Agreement
If the validity of a prenuptial agreement is challenged, the Massachusetts courts are required to look at the validity of the agreement both the time of execution and the time of its enforcement. An agreement is valid at the time of execution if the following conditions are met: (1) the agreement was fair and reasonable at the time of execution, and (2) each party has made full financial disclosure to the other prior to the execution of the agreement. Parties must fully and accurately disclose financial situations to ensure that the prenuptial agreement takes into consideration any potential changes to the net worth of the individual. A prenuptial agreement is treated as fair and reasonable at the time of enforcement of the agreement unless circumstances that occurred during the marriage rendered one of the spouses unable to support one’s self.
Before entering into a prenuptial agreement, it is wise for parties to make sure that the terms of the agreements are fully understood. The parties must also understand that each need to be represented by a separate attorney to ensure that each has a full and capable representation. Oftentimes, individuals are under impression that one attorney can just prepare the agreement for both, but it is neither proper nor a way to ensure that the agreement is enforceable.