Premarital, post-nuptial or cohabitation agreements are used by the intended spouses (or co- habitants) to determine, before their marriage, what each person’s rights and obligations will be in the event of a divorce. These agreements are typically used to protect pre-marital assets or accretion in wealth stemming from those premarital assets, protect pre-marital business ownership interests, ensure children from a prior marriage are protected, deal with differences in wealth or ages and the consequences thereof, handle the way assets acquired during the marriage are to be distributed, or protect anticipated inheritances.
In order for the agreement to stand up in court, the agreement must be in writing and have a statement of assets attached to it.
The agreements can address or focus on the following:
- The rights and obligations of each of the parties in any of the property of either or both of them whenever and wherever acquired or located;
- The right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property;
- The disposition of property upon separation, marital dissolution, death, or the occurrence or nonoccurrence of any other event;
- The modification or elimination of spousal support;
- The making of a will, trust, or other arrangement to carry out the provisions of the agreement;
- The ownership rights in and disposition of the death benefit from a life insurance policy;
- The choice of law governing the construction of the agreement; and
- Any other matter, including their personal rights and obligations, not in violation of public policy.
On the other hand, premarital agreements cannot predetermine issues relating to children born of the marriage, including child support, custody or parenting time. As to enforcement of premarital agreements, there is a three-step test that must be addressed by a court if the agreement is challenged:
- Was the agreement entered into voluntarily;
- Did the parties have the opportunity to have the agreement reviewed by counsel of his/her own choosing; and
- Was there full disclosure as to all assets, liabilities and income?
If these three items can be shown, then the burden to set aside the agreement shifts to the other side (with a higher burden of proof) and the primary focus will be on whether the agreement was “unconscionable” at time of enforcement.