Prenuptial (Antenuptial) Agreements
Prenuptial agreements allow a husband and wife to agree, prior to marriage, how property should be divided if the couple divorces, and how property that each party has prior to marriage should be treated. For example, a prospective husband owns his own home which will become the married couples residence, if they end up getting divorced, should the ex-wife be entitled to an ownership interest in that property.
A well written prenup will detail whether particular pieces of property (and not just a house, but any and all property) are to become shared or will remain “separate property” should the couple ultimately divorce.
In addition, a prenup will lay out how the debts of each soon to be spouse are to be treated. If one prospective spouse has a large amount of credit card debt, the other spouse is probably not going to want to be responsible for that debt if the couple divorces.
A prenup will also determine how property is going to be distributed if one spouse dies, what the alimony of maintenance obligation is going to be upon divorce, and what the financial responsibilities of each party is going to be during the marriage.
There should also be provisions in the prenup that cover what law is going to be used if there is a dispute as to the agreement. For example, if the couple lives in New York, then New York law will be used in deciding any legal disputes regarding the agreement.
Arbitration
Furthermore, both parties may agree to arbitration or binding mediation instead of going to court to settle any dispute to save time and money. Also, the couple may determine that the prenup will be enforceable for a fixed period of time, after which the prenup is not enforceable. For example, if a couple is married for more than 20 years, then they may want to have the prenup expire as the marriage has lasted for a significant period of time negating the potential impact of a divorce.
Requirements
Prenuptial agreements must be in writing and signed by the spouse to be enforced against to be valid. However, if a verbal prenuptial agreement was created prior to marriage, it might be made valid by the creation and signing of a written agreement after marriage.
Complete disclosure of property and debts is required in order for a prenuptial agreement to be valid. If, for example, a husband falsely understates his wealth, he may find that his wife is not bound to the agreement he mislead her into signing. The standards for disclosure may vary depending on the education and experience of the spouses.
Post-Nuptial Agreement
Finally, if the parties decide post-marriage to enter into an agreement similar to a prenuptial agreement, they can. This is called a postnuptial agreement and is can and does contain many of the same elements that a prenuptial agreement would contain.
