Considering a Pre-Nuptial Agreement
The decision to marry is a deeply personal choice based on many factors. Far too often, finances are the cause of marital strife, and the cause of acrimony after the marital breakdown. This source of tension could be relieved if both spouses reached an agreement prior to the marriage.
A pre-marital agreement (often referred to as a pre-nuptial agreement or “pre-nup”) is particularly useful when either spouse enters the marriage owning assets that they do not wish to become subject to division upon a potential breakdown of the marriage. Instead, the parties agree about what remains separate, what is owned jointly, and the terms of any spousal support. This not only protects the spouses, but also any children from previous relationships.
I am already married. Is it too late?
If the spouses are already married but have concerns about asset division, it is not too late. The spouses can enter a post-nuptial agreement (“post-nup”) which is substantially similar to the pre-nuptial agreement. It is an agreement made during a healthy marriage, not one sprung in contemplation of divorce.
Enforce-ability
In Massachusetts, the courts will generally enforce a pre-nuptial agreement or post-nuptial agreement if it was both fair and reasonable at the time they were created, and at the time enforcement is sought. If either spouse’s individual wealth greatly changes out of balance with the other spouse’s wealth during the course of the marriage, an agreement that may have been fair and reasonable at the time it was created may no longer be fair and reasonable after divorce.
In order to be fair and reasonable, one spouse cannot essentially strip the other of all wealth and means to support himself or herself. Detailed asset disclosures of both parties are required in the agreement so that both parties understand and are making informed choices about any modification of their rights. Also, each spouse should, at the very least, be given an opportunity for independent attorney representation before signing the agreement. In the case of a pre-nuptial agreement, ensure there is ample time for the other party to consider the agreement prior to the wedding to prevent it from being signed under duress.
Pre-nuptial agreements and post-nuptial agreements are wise planning tools to consider to protect not only presently owned assets, but also expected inheritances. Furthermore, the agreements can include provisions requiring to provide insurance coverage, or to set minimum distributions to the other spouse or children in an estate plan. If you would like to discuss options for protecting your family’s assets, please contact me today.