An Overview of Prenuptial Agreements
Prenuptial agreements, commonly known as prenups, are contracts signed by a couple before getting married that typically include an agreement on financial issues and other matters that may arise in the future. For example, a prenup may specify how certain assets will be divided if a couple gets divorced. Other items, like how to financially deal with a child with special needs or allocate responsibility for one or both spouses’ debts, could also be considered in a prenup . Prenups are contractual documents, usually prepared by each spouse’s lawyer, and signed before a wedding, that may deal with the division of property or finances either during the marriage or in the event of divorce or death of one of the spouses. They are usually requested by couples who want to avoid a contentious litigation process and have their potential issues covered in advance. They are generally used by couples with significant wealth or income to protect their individual assets.
Do Prenuptial Contracts Expire?
Generally speaking, the time frame in which a prenuptial agreement is effective is not something that is included in the agreement. On its face, a prenuptial agreement ends as of the date of divorce. The time of separation may be when the prenuptial agreement will end. However, it is not uncommon for a prenuptial agreement to have a termination clause built into it having the agreement terminate upon the occurrence of certain circumstances, such as death of a party or upon the occurrence of a certain date. For instance, a couple maybe consider a prenuptial agreement to be in effect for the first 20 years of their marriage, and the parties may want the agreement to terminate thereafter.
But, even if a prenuptial agreement has a set term or has an event specified in it terminating the agreement, the Court can and will enforce the prenuptial agreement if the Court finds that there was a fair change in circumstances that would result in the termination of the prenuptial agreement.
What Determines the Lifespan of a Prenup?
As discussed in the previous section, a prenuptial agreement generally lasts until the time at which the agreement specifically specifies it will terminate. Nonetheless, there are several factors that play into how long such an agreement will last. Legal stipulations: Certain laws may limit the duration of prenuptial agreements, or act as stipulations that cancel their enforceability. The Uniform Premarital Agreement Act, now enacted in most states, suggests that the courts should not enforce agreements that place unreasonable restrictions on alimony. For example, contracts that state that one spouse shall never receive alimony may likely not hold up in court if they are called into question. In other states, there are statutory time limits as to how long an agreement may remain effective, tending to range from five to ten years. Agreement terms: Further, the terms of an agreement can affect its duration, as it may contain specific regulations as to its duration and effectiveness. Some states permit postnuptial agreements that can displace outdated or expired prenuptial agreements, extending the life of the contract for a period of time. However, states with laws restricting the content of prenuptial agreements may place similar restrictions on postnuptial contracts. In some cases, an agreement may be designated as valid through the end of a marriage, in which case it may last only until the time the couple files for divorce. State-specific statutes: As prenuptial agreements tend to be fairly common across the board, most states have a general legal framework for prenups that is fairly similar. However, whether or not a specific contract will be upheld depends on numerous factors, and ultimately how those laws are applied in that particular state.
Updating or Extending Prenuptial Contracts
While it is quite common to make minor changes to the existing terms of your prenuptial agreement, if extensive changes are required, you would need to renegotiate your prenuptial agreement. In a similar fashion to the negotiations undertaken prior to your existing prenuptial agreement, negotiations must take place for your new agreement. After both parties have signed the amended terms, the agreement would be filed at the county recorder. It is important to note that no judge has to approve your new agreement.
An amendment may not be binding if it does not comply with the Uniform Premarital Agreement Act. For example , if the amendment fees as it regards your children. In such a case, the amendment would fail.
Similar to your first prenuptial agreement, if you care to renew your old one, the same steps must occur. Renewals must be substantially the same as the original agreement. Once you have both agreed to the terms of the renewal and signed the documents, only then can the amended agreement be filed at the county recorder.
Enforceability and Challenges
Once a prenuptial agreement is in place it is generally enforceable by the courts, so long as it was entered into voluntarily. That said, circumstances may change as time goes on, and in some cases parties may attempt to challenge the agreement or certain terms it contains. One of the more common issues that arise is whether certain portions of the agreement that seem to favor one party or the other can be enforced if circumstances have changed so much since the time the agreement was executed that enforcement would be unfair or inequitable.
Generally speaking, most courts require that parties adhere to the terms of their prenuptial agreements, provided they were entered into in a procedurally and substantively fair manner, and do not involve issues of public policy. However, parties seeking to set aside an agreement will be successful if they can show that the agreement is no longer conscionable due to changed circumstances, or that it is unenforceable as a result of unconscionability, was obtained by fraud or overreaching, or because of another recognized defense.
Circumstances are ever changing, and the longer a marriage lasts the more likely parties are to encounter significant intervene circumstances. Some of the more common challenges involve issues where the evidence shows one party was misrepresented (or misrepresented) certain facts to the other party such as regarding the state of their finances, assets, or even prior relationships. In addition, change in the financial status of one or both parties, or a change in the economic circumstances of one party, such as after a sudden disability or illness, may create a situation where holding the parties to the terms of the agreement would no longer be fair. Moreover, if the parties did not disclose certain assets or properties that were intended to be included in the agreement, and for which the parties are now fighting over, the agreement may no longer be enforceable.
Engaging a Legal Expert
The creation of a prenuptial agreement that meets the specific needs of spouses, while also ensuring that all legally-mandated components are satisfied to make the document enforceable, is an art form. Attempting to harbor the creation process yourself, while bringing in a variety of outside influences and concepts, is ill advised . It ultimately leaves spouses exposed and at risk of not having the document properly enforced down the road. Consulting with and hiring a matrimonial law attorney will enable a couple to draft a prenuptial agreement that satisfies all general and specific components, while also accounting for any unique concerns the parties may have in relation to their current and future financial situations.
