A prenuptial agreement is a contract entered into by couples planning on getting married. They are also known as “prenups”, “antenuptial agreements”, or “premarital agreements.” Couples can also sign a similar agreement after marriage called a “post-nuptial agreement.”
What can prenuptial agreements do?
Parties can agree to any number of things through a prenuptial agreement, including, for example:
- Property rights for property acquired before marriage.
- Inheritance rights, including provisions for children by a previous marriage.
- Alimony/palimony issues and other monetary issues relevant to divorce.
- Management and segregation of business interests.
Prenuptial agreements are good for couples:
- That have significant assets.
- Where there is a gross disparity in wealth before marriage.
- That have children from previous marriages and have interests in guaranteeing inheritance rights.
- Where either or both parties expect a significant inheritance.
- That have a significant difference in age.
- Where one of the parties has a substantial business interest.
- Where one party is bringing substantial debt to the marriage.
- That have one party supporting the other during college.
- Where one party is already retired.
For many of these reasons premarital agreements are becoming key estate planning tools for couples that marry later in life. For example, take a spouse of a second marriage that has significant assets that they want to leave to their children from a first marriage. Merely putting that in a will may not be enough, as the surviving spouse can claim their statutory elective share of the estate. A prenuptial agreement can include a provision that the surviving spouse will disclaim certain assets. That way the estate can pass freely to the children.
Flawed prenuptial agreements can be void
Prenuptial agreements are governed by statute (Minn. Stat. § 519.11) and Court made law in Minnesota. While prenups are a mostly flexible document, there are numerous limitations to what they can do. If a prenuptial agreement is improperly drafted, includes forbidden clauses, is fundamentally unfair, or is not executed properly, the document may be void.
Prenuptial agreements can be important estate planning tools. Remember to seek legal advice when contemplating a prenuptial agreement. Otherwise do not be surprised if a Court is unwilling to enforce it. If you have any questions on prenuptial agreement, please contact Signature Law for a free consultation to answer your questions.