Prenuptial agreements are a great tool for stating the property rights of assets owned before marriage and how marital property and debts will be fairly distributed after marriage. While properly executed prenuptial agreements are generally valid, there are some pitfalls that individuals make that will bring the validity of the agreement into question and risk having a court ruling that the agreement is invalid. There are important steps to reduce the risk of having your prenuptial agreement overturned:
- Each party should have separate and independent legal counsel
To avoid the risk that your prenuptial agreement will challenged later on, it is highly advisable that you and your future spouse have your prenuptial agreement reviewed by a licensed attorney. If your future spouse is unable or unwilling to hire a licensed attorney to review your prenuptial agreement, then you should require that your future spouse sign a waiver of counsel in addition to the prenuptial agreement. Such a waiver should state that your future spouse had an opportunity to consult with counsel but decided not to do so. The waiver should also state clearly that the signer understands and consents to the terms of the prenuptial agreement and that the agreement was signed without any duress or undue influence. If you draft the prenuptial agreement yourself, it may not be as necessary to have the agreement reviewed since you presumably made sure that the term are favorable to you. However, it is still a good idea to discuss the agreement with an attorney to ensure that your property is properly distributed and there are no provisions that will be determined to be unlawful in case the agreement is challenged in the future.
- Make sure to sign it well before the wedding
You want to make sure that your future spouse have a chance to review the agreement and sign it without any pressure. If the agreement is signed to close to the wedding, it may be challenged on the grounds that you would have called the wedding off if your spouse did not sign the agreement. The agreement should be signed in advanced so a court can find that your spouse was not coerced into signing the agreement due to the threat of cancelling the wedding.
- Make sure the agreement is fair
Since a prenuptial agreement is a contract, it is important that it is fair to both parties. If a prenuptial agreement is extremely one sided a court may find that it is unconscionable or extremely unfair and refuse to enforce the agreement. For example, a prenuptial agreement that stated that you are entitled to 95% of the marital assets while your spouse is entitled to 5% may be considered unconscionable and, as a result, rule that the prenuptial agreement is unenforceable. When creating a prenuptial agreement, it is recommended that the terms are not too one sided.
- Fully disclosure of financial situation
It is important that your spouse knows your financial situation before signing the prenuptial agreement so make sure that you fully disclose your assets (e.g. bank accounts, retirement accounts, real estate, intellectual property, etc.). If you fail to reveal important financial information about yourself your spouse may claim that the agreement was not signed knowingly and willing and attempt to throw the agreement out. So be sure to make sure your a re both fully aware of your financial situation.
- Willing consent
Lastly, you want to make sure that you receive the willing consent of your spouse. Do not wait until the last minute to get the agreement signed and state that you will refuse to marry your future spouse unless the agreement is signed. Although it is not required, it is not a bad idea to get the prenuptial agreement notarized and have a witness sign the agreement as well asserting that the agreement was freely entered into.
While there is no fool proof way to prevent your agreement from being challenged and ruled invalid, these are suggested ways to reduce the risk.