You may think that prenuptial agreements are only for the rich and famous, but this is not the case. They can be a valuable tool to protect assets of people of more modest means, as well.
About Helene Taylor
Helene Taylor is a former family law trial lawyer with nearly 15 years of experience in simple and complex divorce and modification matters. Helene founded The Modern Woman's Divorce Guide in 2005 to empower women in divorce by providing information and support. She is passionate about equal rights for women at home and at work and supports many women's organizations, including: Equality Now, the National Council of Women's Organizations (NCWO), the National Women's Law Center (NWLC) and the National Association of Women Business Owners (NAWBO).
Through The Modern Woman's Divorce Guide, Helene strives to reach millions of women and positively affect their lives during and after divorce.
Prenuptial Agreements interview
Recently, Helene took time out of her busy schedule to answer LoveToKnow's questions about prenuptial agreements:
LoveToKnow (LTK): Who needs a prenuptial agreement?
Helene Taylor (HT): While prenuptial agreements ("prenups") are popular among the rich and famous (e.g., Donald Trump, Britney Spears), they are recommended to anyone for whom they make good economic and personal sense.
People who may benefit from prenups include those who:
- Have children from a previous marriage
- Have significant assets, even if they aren't considered wealthy
- Owned their business prior to getting married
- Will be marrying someone with a poor financial track record, high-risk business investments or some other issue that raises concerns
- Want to avoid the emotional and financial stress associated with a contested divorce
- Want a quick and inexpensive method of ending their marriage, if it should fail
- Want to know that their interests will be protected in the event of separation, divorce or death
Issues Covered by a Prenuptial Agreement
LTK: What types of issues can be included in a prenuptial agreement?
HT: Individual state law and state court decisions determine whether an issue may or may not be included in a prenup. In many states, however, prenups can include provisions relating to:
- The rights and obligations of each of the parties regarding property owned or acquired by either, at any time and wherever located
- The characterization of a spouse's earnings during marriage (i.e., separate property vs. community). In California, a properly drafted prenup can override community property laws and parties may agree that the earnings and property acquired during marriage shall be held as separate property.
- The payment of spousal support or maintenance (provided certain conditions are met)
- The allocation, division and distribution of the parties' assets and debts upon separation, divorce or death
- The choice of law that governs the prenup (e.g., California state law)
- Any other matter that isn't illegal or in violation of public policy, including agreements about where the parties will live, which careers they will pursue and how they will raise their children
LTK: Are there any issues that are not appropriate or are illegal to include in a prenuptial agreement?
HT: Again, individual state law and state court decisions determine whether an issue may or may not be included in a prenup. In most states, however, it is inappropriate or unlawful to include any terms that are unconscionable or that violate laws carrying criminal penalties. In California, it is also inappropriate for prenups to promote the dissolution of a marriage or include terms that adversely affect children.
Amending a Prenuptial Agreement
LTK: Should a prenuptial agreement be considered set in stone or can it be set aside at a later time?
HT: In most states, prenups may be revoked or amended by the written agreement of both parties. In addition, courts may set aside prenups for a variety of reasons. Consequently, prenups should not be considered set in stone. However, if a prenup is prepared in accordance with applicable laws and the parties to the agreement refrain from making any changes to the terms, it may remain intact and enforceable for the duration of a marriage.
Setting Aside a Prenuptial Agreeement
LTK: Under what circumstances would the Court consider setting aside the provisions contained in a prenuptial agreement?
HT: The circumstances vary from state to state. In many states, however, a prenup is not enforceable and may be set aside if:
- The agreement was not executed voluntarily
- The agreement was unconscionable when it was executed
- Before the agreement was executed, one of the parties failed to fully disclose his or her assets or liabilities or their values - unless the full disclosure requirement was voluntarily and expressly waived in writing
In California, a prenup may also be set aside if:
- The parties fail to comply with a mandatory waiting period that requires at least seven days between the time the agreement is first presented to a party and the time it is actually signed
- The party against whom enforcement of a prenup is sought was not represented by independent counsel and did not expressly waive, in writing, representation by independent counsel
- The prenup was executed as a result of duress, fraud, or undue influence
- One or both of the parties to the agreement lacked capacity to enter into a contract (e.g., mental incompetence)
- The party against whom enforcement of a prenuptial agreement is sought was not represented by his or her own lawyer and
- Was not fully informed in writing, before signing the prenup, of the terms and effect of the agreement and the rights and obligations he or she was giving up by signing it
- Was not proficient in the language in which the explanation of rights was provided and in which the agreement was written
- Did not execute a separate document before signing the prenuptial agreement, declaring that he or she received the information required by law and indicating who provided the information
The Uniform Premarital Agreement Act (UPAA), which was drafted by the National Conference of Commissioners in 1983, has been adopted by 26 states and the District of Columbia. Many states, however, including California, have amended their version of the Act, by deleting and adding a variety of provisions. The states that have not adopted the UPAA fall into two general categories:
- Those with state laws or court opinions that allow parties to enter into prenups, and
- Those with no clear laws or court opinions on the matter.
See a Lawyer Before Signing
Since the laws governing prenups vary from state to state, and because prenups must be drafted in strict compliance with applicable laws, anyone considering a prenup should seek the assistance and advice of a competent lawyer.