The Definition of Prenup
A prenup is short for "prenuptial agreement." Prenuptial agreements are contracts made between a couple before marriage. The purpose of such contracts is to decide in advance how to dispose of the couple's property in the event of divorce or, sometimes, one spouse's death. These contracts are also known as premarital or antenuptial agreements. Those considering a prenuptial agreement should seek the advice of a lawyer.
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History
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Premarital contracts first emerged in England. Families whose daughters were planning to marry would enter into agreements with the groom to ensure that the bride would not lose control of her property over the course of her marriage. When English common law morphed into American law, the uses of the prenuptial agreement expanded. As well as deciding the disposition of property upon divorce, prenuptial agreements also serve to protect the children of one spouse's earlier marriage.
Requirements of Contract
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A prenuptial agreement is a contract, and as such, must be executed in a way that fulfills the general requirements of contract law. Courts will not enforce oral prenuptial agreements; the contract must be written and signed by the parties to be bound. Both parties must enter into the contract voluntarily, with no use of fraud or threats involved.
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Invalid Agreements
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Occasionally, parties to a prenuptial agreement may craft an agreement that encourages divorce. For instance, if one party guarantees to the other, via the agreement, a huge financial payout upon divorce, the law may find that the financial incentive is great enough to actively encourage divorce. Such agreements are generally held invalid on grounds of public policy, and courts will not enforce the payout.
Waivers
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Sometimes parties to a prenuptial agreement will use the agreement to waive their rights to spousal support after dissolution. Some jurisdictions do not allow such a waiver. Other jurisdictions allow it, but have heightened requirements to make sure that the waiver involved no fraud and duress; such requirements may include independent counsel for the waiving party and a set period of time to look the contract over before signing. No jurisdiction allows parties to use a prenuptial agreement to get out of paying legally required child support.
Second-Look Enforcement
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At the time of divorce, one party may attempt to avoid enforcement of the prenuptial agreement by claiming that the agreement was unfair. Most courts look at the time the agreement was executed in order to determine its fairness. However, a number of jurisdictions become "second-look" jurisdictions, meaning that the court may also look at the time of performance (divorce) to determine the agreement's fairness. Generally, second-look enforcement is appropriate in situations of unexpected occurrence, where events during the marriage have significantly changed the parties' circumstances in some way they could not have anticipated at the time of contract. Birth or adoption of children can also affect a court's decision to enforce.
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References
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- Photo Credit signing a contract image by William Berry from Fotolia.com
