Even during the most anticipated and happiest events, we should plan for something going wrong. A prenuptial agreement, in addition to being a financial planning tool, serves as insurance for couples in case they ever end their marriage. A prenup can help avoid some of the family law problems that arise during divorce.
Prenups in general
A prenuptial agreement is a private contact entered by two soon-to-be spouses before their marriage. Prenuptial agreements can resolve many divorce issues such as allocation of property, debt resolution and protection, business ownership, allocation of gifts acquired during marriage and spousal support. It allows couples to design their own agreement instead of a court imposing a decree on them.
Prenuptial agreements may also set forth each spouse’s financial rights and obligations during their marriage and property distribution if a spouse dies. It can help protect children from a previous marriage or relationship by setting forth how property is passed on to them.
Prenuptial agreements, however, cannot have terms that are illegal or violate public policy. Child custody matters may not be addressed because courts are required to rule on these issues in the best interests of the child.
Discussions should start well before the wedding. Both parties must be entirely transparent about their finances. A court may later invalidate an agreement if a party withheld information. Lack of candor reduces the use of the agreement for financial planning.
To begin, parties should compile a list of all their assets, property, and liabilities, identify important issues and setting forth their goals.
The written agreement must be completed at a reasonable time before marriage to avoid charges of duress which can invalidate the prenup. Both parties must enter it voluntarily and without duress. It should be fair for both parties.
Agreements may take effect upon marriage. Some may also become effective after some years elapsed. A prenuptial agreement can also have an expiration date.
Each party should have their own attorney represent them to assure that their rights are protected and to give them advise. Attorney may also assist with the drafting of the contract and help assure that it meets Minnesota legal requirements.