Introduction – Prenuptial Agreements/Premarital Agreements

Welcome Back to the MVP Estate Planning Blog!

Please feel free to ask questions and engage in the discussion. We will not know how to adequately address your needs and concerns unless you provide us with some feedback.

In this post, I will provide you with basic information regarding Prenuptial Agreements/Premarital Agreements. Most people are not familiar with the term Pre-Marital Agreement, yet it is identical to and operates in the same manner as a Pre-Nuptial Agreement.

Preparing a Pre-Marital agreement is a process that involves significant planning and preparation for both parties to the agreement. We have taken the time to assemble a brief Q&A regarding the essentials related to the planning and preparation of your Pre-Marital Agreement.

What is a Pre-Marital Agreement?
A pre-martial agreement is an agreement made between two people who are contemplating marriage. The agreement requires full and frank disclosure from both parties. It provides a list of all property each person owns and their accompanying debt.

The agreement also lays out the rights, duties and responsibilities of the parties during and upon termination of the marriage through death or divorce. This agreement must be in writing and signed by both parties, with fair and reasonable terms free from fraud and duress to be enforceable in court. The agreement will become enforceable upon the marriage of the parties.

Should I get a prenuptial?
Prenuptial agreements used to be looked down upon; however, they now are becoming more acceptable in our society. You should definitely consider entering into a prenuptial agreement if you have children from a previous marriage, you own significant amounts of property, have previously been married, have a salary over $100,000, or own a business and/or family business. There are four main purposes of a prenuptial agreement: to avoid costly litigation, to protect family and/or business assets, to protect against creditors, and to give you assurance that marital property will be disposed of properly. If you do not have a prenuptial, the State of Maryland will divide the assets of the marital union based on an equitable distribution, equitable does not necessarily mean “equal,” in the event of a divorce.

Should I seek independent counsel?
YES, absolutely. Each party to the marriage should seek independent counsel before entering into a prenuptial agreement so that there is full and frank disclosure, a full understanding of the rights, duties and responsibilities of the parties to the agreement, and to ensure that the agreement is free from duress and fraud. If one party seeks counsel and the other does not, and the terms of the agreement are unfavorable to one party, the entire agreement may be considered unenforceable in a court of law.

What must be disclosed in a pre-marital agreement?
Certain information must be provided by both parties to the agreement, that particular information is provided below:
• Checking accounts
• Certificates of Deposit, Savings Accounts
• Stocks & Bonds
• Mutual Funds
• Real Estate
• Business Interest/Ownership
• Retirement Benefits (IRA, 401(k), other retirement benefits)
• Life Insurance polices/annuities
• Other Trusts, Anticipated Inheritance
• Personal Property (cars, boats, etc)
• Other Personal Property (home furnishings, jewelry, collections, etc)
• Liabilities (home mortgage, debts, etc)
• Other Assets
• Most recent personal federal income tax return

What types of things may be included in a pre-marital agreement?
A prenuptial agreement can include a wide array of things. It may include the following types of provisions:
• Alimony/Spousal Support or Waiver thereof
• Use or nonuse of Joint Bank Accounts
• Filing of Tax Returns
• Agreements about specific purchases or projects
• Purchasing a home/starting a business
• Use/nonuse/limited use of Credit Cards
• How to settle future disagreements
• Lifestyle clauses
• Right to inherit
• Right to be named beneficiary of life insurance policy and/or retirement benefits
However, personal agreements as to household chores, exercising, cooking, etc should be kept out of the agreement, as they are not binding in court, and may cause a Judge to take your pre-martial agreement less seriously.

What CANNOT be included in a pre-marital agreement?
Prenuptial agreements have been drafted to include almost anything; however, there are certain provisions that cannot be included and if they are, will be stricken and unenforceable. Those provisions are provided below:
• Illegal actions and issues that are against public policy
• Restricting child support, custody or visitation rights
• Financial incentives for divorce
Almost anything else may be included in a prenuptial agreement and have been included in such agreements.

Can I revoke my pre-marital agreement?
A pre-martial agreement may be revoked after the marriage by written agreement signed by both parties, free from fraud and duress.

**Words of Advice**:
Speak with your significant other regarding the benefits, and disadvantages of a prenuptial agreement before seeking the assistance of experienced attorneys. It will make the whole process and the final document more balanced if you have the necessary time and patience to discuss your options with your partner before preparing the document. It’s best to have a written outline prepared beforehand of what you want included in your prenuptial agreement.

If you or a loved one is contemplating a prenuptial agreement, think about it, discuss it with your partner, and contact our law firm for more information.

Our helpful and capable staff invites you to contact us today to schedule an informative, 30 minute free, initial consultation with an estate planning attorney.

PLEASE LOOK FORWARD TO OUR NEXT BLOG POSTING SCHEDULED FOR TUESDAY, JUNE 1, 2010