Prenuptial agreement


Prenuptial agreement

A prenuptial agreement, antenuptial agreement, or premarital agreement, commonly abbreviated to prenup or prenupt, is a contract entered into prior to marriage, civil union or any other agreement prior to the main agreement by the people intending to marry or contract with each other. The content of a prenuptial agreement can vary widely, but commonly includes provisions for division of property and spousal support in the event of divorce or breakup of marriage. They may also include terms for the forfeiture of assets as a result of divorce on the grounds of adultery; further conditions of guardianship may be included as well.

In some countries, including the Netherlands, the prenuptial agreement not only provides for the event of a divorce, but also to protect some property during the marriage, for instance in case of a bankruptcy.

Many countries, including Canada, France, Italy, and Germany, have matrimonial regimes, in addition to, or some cases, in lieu of prenuptial agreements.

Postnuptial agreements are similar to prenuptial agreements, except that they are entered into after a couple is married.[1][dead link][2]

Contents

Legal recognition

Laws vary between both states and countries in both how to draft them and in whether they will enforce such agreements.

United Kingdom

Prenuptial agreements have historically not been considered legally valid in England. This is still generally the case, although a 2010 Supreme court test case between the German heiress Katrin Radmacher and Nicolas Granatino,[3] indicated that such agreements can "in the right case" have decisive weight in a divorce settlement.[4] The Law Commission is due to consider whether a change should be made to the letter of the law, recognizing prenupts in a more general way; they will report on the matter in 2012.

Continental Europe

Prenuptial agreements have long been recognized as valid in several European countries, such as France, Belgium, the Netherlands, Germany, Switzerland, Sweden, Denmark, Norway and Finland. While in some of these countries there are limits on what restrictions the courts will see as enforceable or valid (e.g. Germany after 2001, where appeals courts have indicated this), a written and properly initiated contract, freely agreed upon, cannot be challenged by, for instance, invoking the circumstances under which the marriage broke down or the conduct of either part. In France and Belgium (as in Quebec, which has the same judicial tradition) prenuptial agreements must be set up in the presence of a notary.

In many of the countries mentioned, prenuptials may also protect the non-shared property and money from being pulled into a bankruptcy and can serve to support lawsuits and settlements during the marriage (for instance if one part has sold or wrongfully mortgaged a piece of property that had been set aside by his/her partner).

United States

Historically, judges in the United States accepted the view that prenuptial agreements were corrupting what marriage was supposed to stand for, and often they would not recognize them. Currently they are recognized, although they may not always be enforced. Both parties should have lawyers represent them to ensure that the agreement is enforceable. In some cases, the parties retain a private judge to be present during the signing, to be sure that neither party has been coerced into the agreement. Some attorneys recommend videotaping the signing, although this is exceptional. Some states such as California require that the parties be represented by counsel if spousal support (alimony) is limited.

Prenuptial agreements are, at best, a partial solution to obviating some of the risks of marital property disputes in times of divorce. They protect minimal assets and are not the final word. Nevertheless, they can be very powerful and limit parties' property rights and alimony. It may be impossible to set aside a properly drafted and executed prenup. A prenup can dictate not only what happens if the parties divorce, but also what happens when they die. They can act as a contract to make a will and/or eliminate all your rights to property, probate homestead, probate allowance, right to take as a predetermined heir, and the right to act as an executor and administrator of your spouse's estate.

A prenuptial agreement is only valid if it is completed prior to marriage. After a couple is married, they may draw up a post-nuptial agreement.

In the United States, prenuptial agreements are recognized in all fifty states and the District of Columbia. Likewise, in most jurisdictions, five elements are required for a valid prenuptial agreement:

  1. agreement must be in writing (oral prenups are generally unenforceable);
  2. must be executed voluntarily;
  3. full and/or fair disclosure at the time of execution;
  4. the agreement cannot be unconscionable;
  5. it must be executed by both parties (not their attorneys) "in the manner required for a deed to be recorded", known as an acknowledgment, before a notary public.

Prenuptial agreements in all U.S. states are not allowed to regulate issues relating to the children of the marriage, in particular, custody and access issues.[citation needed] The reason behind this is that matters involving children must be decided in the children's best interests.[citation needed] However, this is controversial: some people believe that as custody battles are the worst part of a divorce, couples should be able to settle this in advance.[5]

With respect to financial issues ancillary to divorce, prenuptial agreements are routinely upheld and enforced by courts in virtually all states. There are circumstances in which courts have refused to enforce certain portions/provisions of such agreements. For example, in an April, 2007 decision by the Appellate Division in New Jersey, the court refused to enforce a provision of a prenuptial agreement relating to the wife's waiver of her interest in the husband's savings plan. The New Jersey court held that when the parties executed their prenuptial agreement, it was not foreseeable that the husband would later increase his contributions toward the savings plan.

In California, one case (Hall v. Hall, 222 Cal. App. 3d 578 (1990))[6] enforced an oral prenuptial agreement in the probate of the estate of one of the parties because the surviving spouse had substantially changed her position in reliance on the oral agreement. Parties can waive disclosure beyond that which is provided, and there is no requirement of notarization, but it is good practice. There are special requirements if parties sign the agreement without attorney, and the parties must have independent counsel if they limit spousal support (also known as alimony or spousal maintenance in other states). Parties must wait seven days after the premarital agreement is first presented for review before they sign it, but there is no requirement that this be done a certain number of days prior to the marriage. Prenups often take months to negotiate so they should not be left until the last minute (as people often do). If the prenup calls for the payment of a lump sum at the time of divorce, it may be deemed to promote divorce. This concept has come under attack recently and a lawyer should be consulted to make sure the prenup does not violate this provision.

In California, an agreement is very powerful. A couple can waive their rights to share property (community property). It can limit spousal support (although a court at the divorce can set this aside if it deems that the limitation is unconscionable). The agreement can act as a contract to make a will requiring one spouse to provide for the other at death. It can also limit probate rights at death, such as the right to a probate allowance, the right to act an executor, the right to take as a predetermined heir, and so forth.[citation needed]

In California, Registered Domestic Partners may also enter into a prenup. Prenups for Domestic Partners can have added complexities because the federal tax treatment of Domestic Partners differs from that of married couples.

In California, courts have not allowed penalties in prenups that sanction people for infidelity or using recreational drugs. Court will not enforce requirements that one person will do the dishes or that the children will be raised in a certain religion.

Postmarital agreements are treated very differently in California law. Spouses have a fiduciary duty to one another so premarital agreements come under a special category of agreements. There is a presumption that the postmarital agreement was obtained by undue influence if one party gains an advantage. Disclosure cannot be waived in the context of a postmarital agreement.

Of note, unlike all other contract law, consideration is not required, although a minority of courts point to the marriage itself as the consideration. Through a prenup, a spouse can completely waive rights to property, alimony or inheritance as well as the elective share and get nothing in return.

A sunset provision may be inserted into a prenuptial agreement, specifying that after a certain amount of time, the agreement will expire. In a few states, such as Maine, the agreement will automatically lapse after the birth of a child, unless the parties renew the agreement. In other states, a certain number of years of marriage will cause a prenuptial agreement to lapse. In states that have adopted the UPAA (Uniform Premarital Agreement Act), no sunset provision is provided by statute, but one could be privately contracted for. Note that states have different versions of the UPAA.

Choice of law provisions are critical in prenups. Parties to the agreement can elect to have the law of the state they are married in govern both the interpretation of the agreement and how property is divided at the time of divorce. In the absence of a choice of law clause it is the law of the place the parties divorce, not the law of the state they were married that decides property and support issues.

In drafting an agreement, it is important to recognize that there are two types of state laws that govern divorce – equitable distribution, of which there are 41 states and 9 states that are some variation of community property. An agreement written in a community property state may not be designed to govern what occurs in an equitable distribution state and vice versa. It may be necessary to retain attorneys in both states to cover the possible eventuality that the parties may live in a state other than the state they were married. Often people have more than one home in different states or they move a lot because of their work so it is important to take that into account in the drafting process.

There are several ways that a prenuptial agreement can be attacked in court. These include lack of voluntariness, unconscionability, and a failure to disclose assets.[7]

Australia

Prenuptial agreements are recognised in Australia by the Family Law Act 1975 (Commonwealth).[citation needed] [8] oo

South Africa

In South Africa, a civil marriage is, by default, a marriage in community of property. To marry out of community of property, the spouses must notarize an ante-nuptial contract.

Premarital mediation

Premarital mediation is an alternative way of creating a prenuptial agreement. In this process, a mediator facilitates an open discussion between the couple about all kinds of marital issues, like expectations about working after children are born and saving and spending styles as well as the traditional premarital discussions about property division and spousal support if the marriage is terminated. The engaged couple makes all of the decisions about what would happen in the event of a separation or divorce with the assistance of the mediator. They then draft either a deal memo or a premarital agreement and have it reviewed by their respective attorneys. An agreement developed via mediation is typically less expensive because fewer hours are spent with attorneys because the couple has made all of the decisions together, rather than one side vs. the other.[citation needed]

Catholicism

Prenuptial agreements are a matter of civil law, so Catholic canon law does not rule them out in principle (for example, to determine how property would be divided among the children of a prior marriage upon the death of one spouse).

In practice, prenuptials may run afoul of Church law in a number of ways. For example, they cannot subject a marriage to a condition concerning the future (such as an agreement about the dividing of assets in case of divorce). The Code of Canon Law provides: "A marriage subject to a condition about the future cannot be contracted validly." (CIC 1102)

The Canon Law: Letter and Spirit, a commentary on canon law, explains that condition may be defined as "a stipulation by which an agreement is made contingent upon the verification or fulfillment of some circumstance or event that is not yet certain." It goes on to state that "any condition concerning the future attached to matrimonial consent renders marriage invalid." For example, a marriage would be invalid if the parties stipulated that they must have children or they have the right to divorce and remarry someone else. [1] Catahar

Judaism

In Judaism, the ketubah, a prenuptial contract, has long been established as an integral part of the Jewish marriage, and is signed and read aloud at the marriage ceremony. It contains the husband's requirement to support his wife by providing her with food, clothing and marital relations, as well as providing for the wife's support in the case of divorce or the husband's death. However, under this passage, a woman is free to leave if her husband doesn't provide for her.

In 2004, the High Court of South Africa upheld a cherem against a Johannesburg businessman because he refused to pay his former wife alimony as ordered by a beth din.[9][10]

Recently, a movement supporting an additional prenuptial agreement has emerged in some Modern Orthodox circles. This is in response to a growing number of cases in which the husband refuses to grant a religious divorce. In such matters, the local authorities are unable to intervene, both out of concerns regarding separation of church and state and certain halakhic problems that would arise. This situation leaves the wife in a state of aginut, in which she is unable to remarry. To remedy this situation, the movement promotes a prenuptial agreement in which the couple agrees to conduct their divorce, should it occur, in a rabbinical court.

References


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Look at other dictionaries:

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  • prenuptial agreement — UK US noun [C] also INFORMAL pre nup) LAW ► an official document that two people sign before they get married, which says what will happen to their money and property if they divorce: »He asked her to sign a prenuptial agreement when they got… …   Financial and business terms

  • prenuptial agreement — n. an agreement made by some couples prior to marriage, for the purpose of settling legal issues, as of ownership and division of property, should the couple later divorce: also Informal prenup …   English World dictionary

  • prenuptial agreement — UK [priːˌnʌpʃ(ə)l əˈɡriːmənt] / US [prɪˌnʌpʃəl əˈɡrɪmənt] noun [countable] Word forms prenuptial agreement : singular prenuptial agreement plural prenuptial agreements an agreement made by a man and woman before they marry about how they will… …   English dictionary

  • Prenuptial Agreement — A type of contract created by two people before entering into marriage. This contract could outline each party s responsibilities and property rights for the duration of the marriage. More commonly, prenuptial agreements outline terms and… …   Investment dictionary

  • prenuptial agreement — noun Date: 1978 an agreement made between a man and a woman before marrying in which they give up future rights to each other s property in the event of divorce or death called also pre•nup prenuptial …   New Collegiate Dictionary

  • prenuptial agreement — noun a legal document, signed by both parties before marriage, stating the legal claims on each others estate upon a subsequent divorce Syn: antenuptial agreement, premarital agreement, prenup …   Wiktionary

  • prenuptial agreement — Law. a contract between two people who are about to marry regarding their respective property and support rights upon termination of the marriage by divorce or death, and sometimes regarding property rights during the marriage. Also called… …   Universalium

  • prenuptial agreement — pre|nup|tial a|gree|ment [ pri,nʌpʃəl ə grimənt ] noun count an agreement made by a man and woman before they marry about how they will divide their money and property if they get divorced …   Usage of the words and phrases in modern English

  • prenuptial agreement — noun an agreement made by a couple before they marry concerning ownership of assets in the event of a divorce …   English new terms dictionary


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