One very important and useful agreement marrying couples enter into nowadays is the prenuptial or premarital agreement, a contract which clearly suggests how a couples’ properties and assets will have to be distributed in the event of divorce, legal separation, dissolution or annulment of marriage or death. Though not intended to take away the romance in a marriage, a premarital agreement is, in fact, a very wise financial move as it will shield the divorcing couple’s financial future and not leave them suing one another for what one believes ought to be his or hers.
Though not originally an American practice, the need to enter into the agreement was introduced in 1848 through the Married Women’s Property Act. Before this Act was made a law, women who were married were recognized only as their respective husband’s extension; thus, at the moment of marriage, she would lose all her rights to possess, sell or transfer any property, earn income or receive educational training (unless permitted by her husband). If she would be allowed by her husband to work, then she will have to surrender whatever she will earn to her husband. All these were due to the legal rule called “coverture,” the law that required women, who enter into marriage to surrender her identity and rights to her husband. Due to this policy, any woman, even those who were wealthy, faced the chance of losing everything she owns to her husband.
The introduction of the prenuptial agreement allowed divorcing couples to justly take back what was rightfully theirs from the very start and divide whatever profit they earned within the marriage faster. Other great benefits the agreement offer couples include:
Protection of family inheritance;
Protection of their child’s/children’s financial security;
Security over business or personal assets made before entering into marriage;
Shorter and less expensive court settlements in case the marriage does not work
Prenuptial agreements will have to be discussed openly, honestly and candidly, though, so as not to create any feeling of mistrust. Both parties should understand its real aim too to make them appreciate it more.
Law firms explain much more clearly the importance and benefits of a premarital agreement, as well as the things to watch out for and avoid when drafting one. The firm Kirker Davis, LLP, for example, says, “ Drafting and signing a premarital agreement remains a contentious issue for many couples. However, having a premarital agreement is the best way to protect the interests of you and your spouse. A premarital agreement is defined in the state of Texas as ‘an agreement between prospective spouses made in contemplation of marriage and to be effective on marriage.’ The agreement must pertain to property held before or gained after marriage, including income and earnings.
Premarital agreements are binding legal documents. They are typically enforceable without consideration, meaning the court will enforce the agreement even if there is nothing of value exchanged for one party. There are a few instances in which a premarital agreement can be nullified. Many of these cases involve the circumstances around the signing of the agreement. Some of the most common reasons for nullification include:
A party did not sign the agreement voluntarily
A party was not provided fair and reasonable disclosure before signing
A spouse did not have, or reasonably could not have, adequate knowledge of the property
A party did not voluntarily and expressly waive any right to disclosure of the property or financial obligations”
Due to all these, “It is imperative to have the strongest legal team conducting your premarital agreements to protect your best interests.”