Purpose of a Prenuptial Agreement

Prenuptial agreements specify property rights of prospective marriage couples.

A prenuptial agreement specifies the property rights and conditions for a soon-to-be married couple in the event of a divorce or separation. Both parties sign the contract agreement, and it becomes effective at the time of marriage. Every state allows a prospective marriage couple to formulate a prenuptial agreement, but the agreement must adhere to state requirements.

Who Benefits from a Prenuptial Agreement

Anyone who desires to marry and intends to maintain his current property and other assets in the same status will benefit from a prenuptial agreement. Also, any individual who intends to protect his inheritance rights or the inheritance rights of family members regarding certain property will benefit from a prenuptial agreement.

Reasons for a Prenuptial Agreement

An individual may want a prenuptial agreement if she has acquired any assets prior to marriage that she wants to protect in a future divorce. For instance, if she owns a home that is separate from her potential spouse, then a prenuptial agreement may protect this asset. Also, if she owns a business or is pursuing a college degree, a prenuptial agreement may protect these investments. Additionally, having a child from a prior marriage is another reason to consider a prenuptial agreement, to protect the child's inheritance rights.

Objectives of a Prenuptial Agreement

Without a prenuptial agreement, the court determines the allocation of property and assets during a divorce. If a prospective marriage couple has acquired separate debts or assets prior to marriage, the couple can stipulate in the prenuptial contract that those debts and assets will remain separate upon a divorce. Also, the two individuals may use the prenuptial agreement to determine how debts and assets will be handled during the marriage, and how they will allocate their income during the marriage. Additionally, the spouses can agree to forfeit any inheritance rights to certain property and allow any children or other family members to inherit certain property. Therefore, the prenuptial agreement can ultimately protect the inheritance rights of an individual's children or other family members.

Limitations of a Prenuptial Agreement

Any prenuptial agreement that has illegal provisions is unenforceable. Also, any provision that violates a state's public policy may be set aside in court. For instance, most courts will not uphold a provision that is against the welfare of children. Therefore, courts will not enforce an agreement that inhibits or limits child support and visitation rights to either spouse. Also, a court may not uphold an agreement that provides incentives to either spouse upon a divorce, because the contract may be viewed as encouraging a divorce. Personal provisions in the agreements may be unenforceable in court, such as having children during the marriage, birth control, household chores and other non-financial matters.

Legality of the Agreement

A court will enforce the provisions in a prenuptial agreement, if the provisions are reasonable and lawful.

References

• Nolo: Prenuptial Agreement--An Overview
• Nolo: Prenuptial Agreement--What the Law Allows
• Bankrate: Everything You Need to Know About Prenuptial Agreements