Prenuptial Agreements/Post-Nuptial Agreements
A prenuptial agreement, antenuptial agreement, or premarital agreement, all commonly referred to as a prenup, is a written contract entered into between two individuals who intend to marry and desire to alter the legal rights afforded them under the law as a married couple at the time of death or divorce. A post-nuptial agreement, or post-nup, is used for a similar purpose as a prenup, with the main difference being that the parties enter into the written agreement after their marriage.
Our family law attorneys at Brown, Goldstein & Levy have negotiated, drafted, and litigated the validity of both prenuptial agreements and post-nuptial agreements on behalf of our clients. We have represented high net-worth individuals who have substantial investments, real estate holdings, and business interests that need protection in the event of a divorce. We also have represented the less wealthy partner so that the agreement is fair and reasonable and protects that individual’s future interests at the end of the marriage, whether by divorce or death. We work closely with our clients so that they fully understand the terms of the agreement and that the agreement is valid and enforceable.
When Is a Prenuptial Agreement Necessary?
Most couples who intend to marry do not need a prenuptial agreement. This is particularly true for couples that are coming into the marriage with very little assets. However, if one or both of the parties have acquired significant assets prior to the marriage, has income from a trust fund, or there is a significant difference in the parties’ incomes, a prenuptial agreement may be something that the couple should consider. A party who intends to remarry after a divorce or has children from a previous relationship may also want to consider the potential benefits of a prenuptial agreement.
What Is the Purpose of The Prenuptial Agreement?
A prenuptial agreement is traditionally used to protect a party’s assets in a divorce or upon death in a manner that is different from that provided automatically to married spouses under the law. For example, in a Maryland divorce, property that is acquired during the marriage is generally considered marital property no matter how the property is titled and is subject to an equitable division between divorcing parties. A prenuptial agreement can alter this general rule if, for example, the parties agree that their marital property should be divided in accordance to how it is titled at the time of the divorce (i.e., property titled in the wife’s name will be hers and that titled in the husband’s name will be his).
In addition to setting forth the terms for the division of assets at the end of the marriage, a prenuptial agreement can address many other issues. These issues can include:
- Identification of separate property (non-marital property);
- Identification of marital property;
- Distribution of property in the event of death;
- Spousal support or the waiver thereof;
- Retirement contributions;
- Type and amount of life insurance that must be maintained during the marriage;
- Estate planning requirements;
- Education funds;
- Student debt;
- Who moves out of the marital home and when;
- Procedures for selling any real estate property, including the marital home; and
- Interests in any businesses.
What is the Purpose of a Post-Nuptial Agreement?
Most parties enter into a post-nuptial agreement in the following circumstances:
- Prior to getting married, the couple decided to have a prenuptial agreement but were unable to have it fully completed prior to the marriage;
- The couple decide to change the terms of their prenuptial agreement;
- One spouse has separate property that was premarital or inherited and is willing to commingle it with marital property but wants the premarital or inherited property returned in the event the marriage dissolves; and
- The marriage is having problems and a spouse wants to have some financial protections in place in the event of a divorce, while the parties work on their marriage.
Can the Validity of a Prenuptial or Post-Nuptial Agreement Be Challenged?
Like any contract, the validity of a prenuptial agreement or a post-nuptial agreement can be challenged if it fails to meet certain qualifications. The determination of whether the agreement is valid is based on the facts that exist as of the date the agreement was made, not with respect to circumstances that arise after the execution of the agreement.
Whether a prenuptial agreement or post-nuptial agreement is valid depends on the fact of each case. Some of the issues to be considered when challenging the validity of these agreements are as follows:
- Was the agreement entered into voluntarily, freely, and with full understanding of its terms?
- For prenuptial agreements, did both parties fully disclose their incomes, all property owned by them, their debts, and the value of their assets and liabilities?
- Was the prenuptial agreement executed hours before the marriage or did each party have ample opportunity to review and negotiate the terms of the agreement?
- Was a party threatened in any way that made the execution of the agreement involuntary?
- Was the agreement procured by fraud or made under duress?
- Was the procurement of the agreement unconscionable because there was a deception or a refusal to bargain over contract terms?
- Was the effect of the agreement unconscionable because the contract, in whole or in part, is unreasonably or grossly favorable to one side?
- Was the party represented by counsel and if not, did that party knowingly waive his or her right to counsel?
Challenging the validity of prenuptial and post-nuptial agreements often involve complex issues of law and facts. These agreements are not readily invalidated. However, our family law attorneys at Brown, Goldstein & Levy have successfully challenged such agreements in court and have successfully defended them as well. If you need assistance with a prenuptial agreement or a post-nuptial agreement, please call our matrimonial attorneys at (410) 962-1030. We are here to help you.