A prenuptial agreement (occasionally referred to an antenuptial agreement) is a contract between a soon-to-be husband and wife which sets forth terms that will govern the distribution of the assets and liabilities of the parties in the event of a divorce. Most people are aware of the concept of a prenuptial agreement. What is perhaps less known is why have a prenuptial agreement and how one is drafted.
There are various reasons to have a prenuptial agreement. First and most obvious is one or both parties want to ensure that in the event of divorce certain assets will remain the property of spouse who owned that asset prior to the marriage. That asset could be a cash account or a business interest that the spouse does not want divided in a divorce case. Another reason is simple practicality. The couple may decide that if a divorce occurs, they do not want to fight or get involved in a protracted divorce case.
Once the decision has been made to enter in to a prenuptial agreement, the next step is drafting the agreement. As an initial matter, it is strongly recommended that both parties have separate counsel. This is to ensure that both parties are independently advised as to the terms of the agreement and the effect of those terms in a divorce. A prenuptial agreement is drafted to set forth which party will be entitled to which assets (usually set forth on an attached schedule) and, if applicable, which party will be liable for certain debts. A prenuptial agreement can cover many assets or a single asset depending on the wishes of the couple. For instance, maybe the wife has an interest in a small business she wants or needs to keep separate from the marital estate. The prenuptial agreement can cover only that asset. Alternatively, the prenuptial agreement can apply to all assets of the parties, including anticipated earnings on accounts.
A prenuptial agreement is not enforceable as to terms involving children such as custody and parenting time in the event of divorce. A court is charged with assessing the best interests of a child at the time a ruling is made and contractual provisions setting forth which parent will have custody will not be controlling.
Please contact us if you would like to discuss your potential prenuptial agreement further.