We’ve all seen the statistic: nearly half of all first marriages end in divorce. However, did you know that nearly 70 percent of all subsequent marriages (meaning second, third, etc.) end in divorce?
Given this high rate of divorce, it is not uncommon for people to begin to think about their asset protection options. Meaning, what can they do to safeguard their property in the event of a divorce?
One method of protecting property is through the drafting of a prenuptial agreement (or a premarital agreement as it is otherwise known).
What is a prenuptial agreement?
A prenuptial agreement is a legally binding contract executed by a future husband and wife before they are married. It summarizes the rights and expectations of each party regarding important legal matters.
How does it relate to property?
Simply put, it allows the couple to decide well in advance how their property will be classified (marital v. separate) and divided in the event of a divorce.
Aren’t prenuptial agreements only utilized by people with significant assets?
Prenuptial agreements need not only be utilized by those with significant assets. The truth of the matter is, prenuptial agreements can be valuable asset protection tools for everyone, including those of modest means.
If I want to execute a prenuptial agreement, what legal requirements must be followed?
The following general requirements must be met in order for a court to consider a prenuptial agreement valid:
- The prenuptial agreement must be in writing
- The husband and wife must disclose all assets (and liabilities)
- The prenuptial agreement must be signed by both the husband and the wife before a witness
- The prenuptial agreement cannot be grossly unfair, meaning your spouse cannot receive a tiny share of otherwise significant assets/money
- The prenuptial agreement must be executed voluntarily (without any type of coercion)
The following is for informational purposes only and not to be construed as legal advice. Contact a legal professional to learn more about your family law issue.