Many people who have felt the sting of a divorce decide to once again take the plunge and tie the know once again. When they do, they often want to minimize the chance of going through the divorce experience again. That is where a prenuptial agreement comes in.
Prenuptial agreements are also called antenuptial agreements, premarital agreements, or prenups. Prior to approximately 1990 they were not even allowed in the Commonwealth of Kentucky because it was believed that they would actually encourage divorce. A Kentucky Supreme Court case allowed couples to determine how their assets and debts would be divided in the event of a divorce thereby bringing Kentucky into line with a number of other states on this issue.
The issue of whether you should even bother with a prenuptial agreement really depends on your situation. If either one of the soon-to-be-spouses has significant assets that they wish to keep separate from the other spouse, a prenuptial agreement is a definite consideration. If neither party is coming into the marriage with any significant financial holdings, there probably is no real need for one.
If you have determined that a prenuptial agreement is something that you want to consider, it is important to understand what can be covered and what cannot. Moreover, the actual drafting and way the document is executed is important as well.
A prenuptial agreement can cover a number of issues such as:
- What property is each party's non-marital property
- What property will remain each party's non-marital property
- How marital property will be determined in the event of a divorce
- How each party's property will be divided in the event of a divorce or even death
- How debts will be divided in the event of a divorce
- The effect commingling assets will have in the event of a divorce
- How income and appreciation in value of assets will be treated in the event of a divorce
- What happens to each spouse's retirement benefits in the event of a divorce
- Whether maintenance will be awarded and how much
A prenuptial agreement cannot deal with any issues involving child custody or the payment of child support. Those issues will have to be decided upon either by agreement of the parties in event of a divorce with approval by the court or the court will have to make the final decision. The reason for this is that the court is the final arbiter of child custody and, more specifically, the child's best interest in the event of a couple's divorce. That decision cannot be predetermined prior to the marriage even taking place. Additionally, child support is typically seen as a right of the child which cannot be bargained away by either parent prior to the divorce. In fact, many judges are loathe to allow child support to be waived absent a showing of good cause in the event of an actual divorce.
In a future post, we will discuss the actual execution and enforceability of a prenuptial agreement. For now, if you think a prenuptial agreement may be right for you, it is important that you meet with your family law attorney, estate planning attorney and financial adviser to discuss your options.
Photo courtesy of scienceatlifeLabels: ante nuptial agreement, antenuptial, child custody, child support, marital debt, marital property, marital settlement, non-marital property, pre-divorce, premarital, prenuptial agreement, property division
