Overview
It is always wise to admit the fact that nearly half of all marriages are culminating in divorce. In the present scenario, where breaking up of wedlock has become just another issue, call for Pre-marital Agreements (“PMA”) has radically risen. A Pre-marital Agreement which is other wise called “pre-nuptial” or “ante-nuptial agreements” are binding legal contracts created between prospective spouses.
Pre-marital Agreements ensure the individual assets to remain with the individual throughout the marriage and also if the marriage fails. Additionally Pre-marital Agreements resolves various complicated subjects which might sound more complex in the event of divorce, since the parties are stressed out at the time of separation. For e.g. blended family issues, questions on transferring ones individual properties to children from former marriages etc. This agreement becomes effective upon marriage, making marriage the sole consideration and is enforced upon divorce. As a preparation for the rainy day it is worthwhile to craft a Pre-marital Agreement.
General Essentials
A valid agreement depends on many facts and circumstances. For a valid Pre-marital Agreement, it should be prepared meeting all the necessary requirements. Even though there are no established provisions that are always used since the laws in each state governing PMA vary to a large extent. Some essential ingredients are: The document should be in writing, must be signed by both spouses, should be accompanied by making of complete written disclosure of each others’ assets and liabilities, the terms should be reasonable, both parties should be given a sufficient opportunity to review the proposed agreement and to obtain separate legal advice, before signing. Giving reasonable opportunity to review the proposed agreement helps the parties mutually to avoid embarrassing situation on the wedding eve like, springing an agreement on the bride/groom.
Like in general contracts, parties entering into PMA should enter freely and voluntarily and it should be entered free from fraud and duress. The PMA can stretch to any extend to incorporate each individual’s rights and property.
Uniform Pre-marital Agreements Act (UPAA)
The law governing PMA lacks uniformity, it differs from state to state. Hence to cure this disparity the National Conference of Commissioners on Uniform State Laws drafted a Uniform Premarital Agreement Act (UPAA). It has been adopted in 26 states (and introduced in the legislatures of 2 more states as of 2005). The UPAA has given the parties the liberty to select their desired state’s law to govern their agreement. Any person who intends to live in or plan to live in any of those states which has adopted the UPAA, it is advantageous to select that state. The benefit of selecting one of those states is that they have comprehensive statutes covering most of the issues arising with the enforcement of PMA. In states other than those that have enacted the uniform act, one is forced to search through the case law, which can change daily, leaving inconsistency in the law governing the PMA.
Enforceability
The UPAA provides that a premarital agreement is not enforceable if the party challenging the agreement can prove either of the following: that the signature was obtained by use of force or fraud, or that the agreement was “unconscionable”. The arguments that are generally used by the challenging party are for e.g. That the complainant didn’t understand the terms of the agreement, complainant was physically or mentally or somehow forced to sign the agreement, and at the last minute, the opposite party never made a complete disclosure of his or her assets, the complainant was ill, confused, under stress and drunk etc at the time of signing the agreement. Various factors are relied upon by the court in determining the agreement was unconscionable or not, it includes factor such as each party had separate legal assistance while preparing the agreement.
PMA can be revoked or modified by the parties. But this can be done only through written agreement signed by the parties. If any modification or elimination is done to the spousal support clause in the PMA, which qualifies a party for public assistance, the court will go the extent of ordering spousal support more than what is prescribed in the PMA thus avoiding the need for public assistance.
General Topics covered by the agreement
PMA typically envelops a number of following topics: Previous marital history, and family backgrounds, Assets and prospects each spouse is bringing into the marriage, ownership of investment earnings from such property, decisions on the earnings of each spouse, property inheritance issue, Situations in the event of death of a spouse, Where the couple will reside, How taxes will be handled (e.g. joint or separate returns),The level of support in the event of a divorce, and dealing with debts owed before the marriage and those thereafter incurred. When the agreement is being prepared for a second or third marriage of any one of the parties usually provisions are incorporated bequeathing certain assets to a child of a previous marriage rather than to the new spouse. The issues regarding the child custody may not be determined by the agreement. Apart from this, under UPAA the parties shall incorporate provisions, as to which state law shall control interpretation of the agreement.
Conclusion
As pitfall in marriages are expected, it is imperative to be equipped with the most practical way through the hard days of divorce, which is made easy by preparation of Pre-marital Agreements. An enactment like Uniform Pre-marital Agreement Act has made the job much easier.
