Prenuptial agreements are becoming more and more common as the rate of divorce rises. These documents provide both parties with a sense of confidence and show that a couple has put some thought into the future.
What is a Prenuptial Agreement?
A prenuptial agreement is a document that is signed by both members of a couple before they actually get married. It basically sets up a plan with regards to the finances if a divorce should occur or if one of the members of the couple should die. If there is no prenuptial agreement set up, a judge will decide precisely how the financial assets are split in the case of a divorce.
What are the Characteristics of a Prenuptial Agreement?
A prenuptial agreement is always in writing. Oral agreements or any other type of informal written agreement is not considered to be a valid prenuptial agreement in court.
The document must be created and signed by both parties without any kind of coercion. This is a very important characteristic to note because, should one party be "railroaded" into signing, then the agreement itself is inherently unfair and may be deemed void in court.
All assets are completely disclosed by both parties. Should one or both parties be found to have hidden assets, then the prenuptial agreement is null and void. If a judge comes across a prenuptial agreement that is absurdly unfair, then he or she has the right to throw it out. The agreement must be signed by both parties in front of a public notary.
What's Usually Included in a Prenuptial Agreement?
The largest part of a prenuptial agreement covers exactly how any debt or assets will be divided in the event of a divorce. It also outlines how certain debts, such as mortgages, will be protected in the case of a divorce. Prenuptial agreements also keep the assets of both parties separate from one another, so that if there is a divorce, each party will have his or her own pool of money.
Prenuptial agreements may also outline precisely how taxes will be paid, how money will be managed, any rules regarding credit cards, and who pays which bills. How property will be given to children from prior marriages is also laid out in these agreements.
What's a Sunset Clause?
A sunset clause establishes that a prenuptial agreement is not valid if a certain number of years pass without divorce occurring.