Let’s face it there is nothing romantic about a premarital agreement. When people ask you about your wedding planning I can guarantee they are not asking you how your prenuptial agreement negotiations are going. Generally, most people are entering into a marriage because they are in love and the last thing they want to think about as they are preparing to head down the aisle is the marriage ending.
Unfortunately, the reality is that nearly half of all marriages end in divorce, and while its true most marriages are based on love and mutual respect, it is also true that at the core of any marriage is a financial partnership.
A premarital agreement is a contract entered into by two people who intend to get married. The contract outlines both parties’ rights should the marriage end. The agreements are most often used when one or both of the parties is seeking to keep a particular asset out of the marital estate, where there is a sizable difference between the income and assets of the parties, or where one party has the possibility of accumulating assets in the future, like a large inheritance.
In order to have a valid and enforceable premarital agreement the agreement needs to be fair and reasonable at the time it was signed and fair and reasonable at the time of the divorce. This is what most lawyers call the “then and now” test.
Fair and Reasonable at Time of Execution
- There must be a full and accurate disclosure of both parties’ financial situations. Every asset should be disclosed, along with the value of each asset. This includes any expected inheritance or assets that a party expects to acquire in the near future.
- Both parties should have their own independent legal advice. If one party has substantially less income and/or assets and is not able to afford an attorney the other party should provide funds for that person to hire their own attorney. You should not recommend an attorney for that person to use and the funds provided should be on par with what the higher income party is paying their attorney.
- The sooner the better! The closer you get to the wedding date the more likelihood there is that your agreement will not be found to be valid. You want to make sure that it doesn’t look like one of the parties was forced to sign because the only other option was cancel or postpone the wedding.
Fair and Reasonable at Time of Dissolution
- This is a relatively easy standard to meet for most couples. The courts have interpreted this statement to mean that the agreement will be upheld so long as one of the parties is not left without enough income or assets to be self-supporting.
- Prenuptial agreements also have their limitations and terms relating to custody, visitation and child support will not be enforceable unless the parties agree to the terms at the time of divorce, and the courts find them fair and reasonable under the Massachusetts laws that would be applied at the time of the divorce.
Record your Agreement
- If your prenuptial agreement has an impact on property rights your agreement and asset schedule should be recorded at your local Registry of Deeds. This makes the agreement enforceable as to future creditors.
As someone who has experienced the process of wedding planning I know that those bridal checklists don’t include sitting down with your lawyer and negotiating a prenuptial agreement, but they should. I get calls from people all the time whose family or friends have finally convinced them to talk to an attorney, but it’s usually only a week or two before the wedding, and that can create serious issues regarding enforceability. Prenuptial agreements should be right at the top of the list next to booking your venue.