As prenuptial agreements are becoming more popular, you may wonder what sorts of things you can include in the agreement. And how do you ensure the agreement will hold up in court?
A prenuptial agreement, or a prenup, is an agreement between two partners that becomes effective when they get married. The goal of the prenup is to distribute property, assets, and debts in cases of death or divorce. For partners entering marriage with assets or debts, a prenuptial agreement is a sensible way to ensure you are both protected. Discussing and negotiating a prenup is also an opportune time to review your financial future and your financial expectations before marriage.
What You Should Include in a Prenup
For a prenup to be valid, the prenuptial agreement must be in writing and signed by both of you. A valid prenup will seek to protect both of you, so the agreement should not heavily favor you or your partner.
An enforceable prenuptial agreement can have provisions related to the following:
- The distribution of property and assets acquired before and during the marriage, including stocks, real estate, and family heirlooms
- The making of a will or trust to ensure the surviving spouse has ownership of specific assets
- The distribution of income earned by each spouse during the marriage
- The protection of assets for adult children born before the marriage
- The definition of community versus separate property
- The management of a joint bank account
- The ownership of a business
- The distribution of debts
- Expected inheritances
- Life insurance policies
- Retirement plans
To ensure the prenup is enforceable, avoid provisions regarding the following:
- The delegation of spousal duties, such as requirements for cooking, cleaning, or personal grooming
- Illegal actions or actions that go against public policy
- Child custody
- Child support
Other Steps You Should Take to Ensure the Prenup Will Hold Up in Court
To ensure your prenup will hold up in court, take note of the following:
- Both of you must negotiate and enter into the prenup voluntarily. Any signs of undue influence, duress, coercion, or fraud may invalidate the agreement.
- You must have the capacity to enter into the agreement. Capacity means each individual is of sound mind and can understand the consequences and benefits of entering into the prenup.
- Each of you must provide a “fair, reasonable, and full disclosure of” your property and financial obligations. Both partners must provide a full accounting of their assets and debts to the other partner so they can jointly make decisions about provisions distributing those assets and debts.
- You must have at least seven calendar days between when you finalize the prenuptial agreement and when you sign it.
- Both of you should seek legal counsel about the provisions of the prenup to ensure the agreement is fair and reasonable to you. If the partner potentially affected by a spousal support provision does not retain legal counsel, be careful about adding the spousal support provision into the agreement.
- Hire a trained mediator to facilitate the negotiation of the prenup and the conversation about the couple’s financial future.
Attorney Dorit Goikhman assists high-net-worth individuals in drafting and negotiating prenuptial and postmarital agreements in Santa Clara and San Mateo counties. Dorit L. Goikhman, the founder of Off the Record Mediation Services, is a trained mediator and experienced family law attorney ready to help you create a prenup that will hold up in court.