What is a Prenup? (And Three Surprising Reasons You Should Have One)
Almost everybody has heard of prenuptial agreements, also known as prenups or antenuptial agreements. But many people don’t know someone who has one (or don’t know that they do). As a result, a sort of mythology has risen up around prenups: that if you have one, you’re planning for divorce; or that prenups are only for the wildly wealthy, with no application for the rest of us. The reality is a little bit different, and it’s worth learning. What is a prenup? And is it worthwhile for someone like you?
Minnesota Prenuptial Agreement Basics
A prenuptial agreement is a contract. Of course, it's not a typical business contract; it's a contract between two people who are planning to get married. In order for this contract to be valid, it has to meet certain criteria:
- It must be in writing, and signed (executed) by both intended spouses.
- It must be executed in the presence of two witnesses and a notary public.
- It must be signed before the parties marry.
- The parties must actually marry after they sign the prenup.
Spouses may agree between themselves to agree to a contract even if it is otherwise unenforceable and never goes before a court. If they want a court to enforce it, certain things will need to be true. For instance, the parties must have made a full and fair disclosure of their assets and liabilities to each other before signing the prenup.
Each spouse must have had the opportunity for their own independent attorney to review the prenup with them. A prenup that the bride presents to the groom the night before the wedding, saying that she won't go through with it unless he signs, might well be struck down by a court. If you want your prenup to be upheld, it's best to have it signed months, not days, before your wedding so there are no claims that it was signed under duress.
The prenup should be fair at the time it is signed; a court is unlikely to honor a prenup giving one spouse 90% of the marital assets. But even if it appears fair when it is signed, a court will also consider whether it is fair at the time of a divorce. A prenup that is grossly unfair is "unconscionable," to use a legal term, and will not be upheld. This is especially true if the outcome leaves one spouse needing public assistance.
What Does a Prenup Cover?
Most prenuptial agreements are intended to address financial issues: who will take certain assets or debts in the event of a divorce; whether alimony (spousal maintenance) will be awarded to one spouse; who will inherit certain property if one of the spouses dies. It can cover almost any topic the future spouses want to agree about. If you want to put in your prenuptial agreement that Spouse A will decide where the family vacations in odd years and Spouse B will choose vacation destinations in even years, you can. (Whether a court will enforce that, or whether you would want to vacation with a spouse who would sue you over it, is another question).
There are, however, some issues that you should not put in your prenup: child custody and child support. As far as child custody is concerned, if you and your spouse cannot agree at the time of a divorce, a Minnesota court must decide that issue based on the best interests of the child. And child support is a duty that the parents owe to the child. They cannot bargain between themselves, before or after the child is born, to reduce or eliminate it.
Three Surprising Reasons You Might Want a Prenup
A prenup is not for everyone—but it is for more people than you might expect. You don’t have to be rich to have a prenuptial agreement. But if you are, you should definitely have one. The cost of having a prenuptial agreement is much smaller than the legal fees involved in a lengthy divorce or the pre-marital assets you might lose in a contentious divorce. By agreeing in advance to most financial issues, you make sure there is less to fight about in a future divorce, which means it will probably be quicker, more cordial, and less expensive.
Even if you do not have significant assets, there are still a number of reasons you might want a prenup. Perhaps the most common is if you or your future spouse have children from a previous marriage. A prenup can specify which of your assets existed before your marriage and are to be inherited by your children. We have seen many cases where a couple married, one spouse died, and their will left most of their assets to the surviving spouse. Then, when that spouse died, their children got all of the assets, and the children of the first spouse to die got none.
Another good reason to have a prenup is if you are a small business owner. Your business may support the family during the marriage, but think for a moment if you would want your future spouse to be involved in or own part of the business after a divorce. If the idea makes you shudder (it should), a prenup is a wise idea to protect your business interests.
Perhaps the most surprising reason of all to get a prenup is if you want your marriage to succeed. That’s right! While most people think of a prenup as something you get in case of a future divorce, the process of identifying issues that are important to you and reaching agreement on them can actually strengthen your marriage. By doing this, you clarify expectations and values so you’re less likely to be blindsided by an issue that arises during your marriage.
Remember, prenuptial agreements don’t cause divorce any more than umbrellas cause rain. But as with an umbrella, a prenup can protect you from the worst of a storm if one should arise.
If you have questions about Minnesota prenuptial agreements, we invite you to contact Mundahl Law to schedule a consultation.