A premarital or “prenuptial” agreement, commonly referred to as a “prenup”, is a legally binding document created by a couple prior to marriage. The prenuptial agreement typically addresses items like the characterization of income during the marriage, division of financial responsibilities, day-to-day living expenses, property distribution, and even its own termination.
Many couples are surprised to find out what may and may not be included in such agreements. The Willick Law Group has been creating prenuptial agreements for over 35 years. We’d love to put our experience and expertise to work for you.
Why Create a Prenuptial Agreement?
There are lots of rules created by statutes and cases that govern the rights and responsibilities people have toward others when single, upon marriage, upon divorce, and upon death. A prenup is a contract between two people who intend to get married.and is best thought of as an opportunity for people to re-write the rules that will govern their marriage, within the bounds of the law, so that their income, property, and other rights and responsibilities will be in accordance with the rules they themselves believe are most appropriate rather than the default rules otherwise automatically applicable.
Our Prenuptial Agreement Checklist
We have created a checklist of things anyone contemplating a prenuptial agreement should consider before hiring counsel to draft such an agreement. Having your thoughts and concerns organized before attempting to create the document itself is vital to the creation of a useful agreement, and the best way to make the process as efficient and economical as possible, by minimizing the need for multiple drafts.
Ideally, the agreement helps both parties and eases crucial concerns prior to the beginning of the marriage, so that couples can begin their married lives together knowing what is expected of them, and what is required. A prenuptial agreement is not designed to be threatening or held over your partner’s head. It simply explains the rules that both parties agree to in terms of finances, property, and other essentials involved in the relationship.
1. Disclosure of Financial Information
Nevada law requires a “full and fair” disclosure of assets, liabilities, and income. No particular form is required. You are not required to “count teaspoons,” but the resulting schedule for each party is required to be attached in advance of signing.
It is vital to the successful creation of your agreement that you disclose all financial information to your attorney. This information will also be shared with your future spouse, and will make up schedules that are attached to the agreement.
2. Property and Income
Nevada law is extremely flexible as to what to do with property and income. Future employment or other income can be treated as separate property, community property, or pretty much any compromised status desired. Parties may, but are not required to, provide who is expected to pay for day-to-day living expenses (rent, utilities, groceries, etc.), what is expected to be separately or jointly owned in the future, etc.
3. Debts and Liabilities
The same considerations relate to future debts and liabilities – which can be made separate, joint, or possibly some of each.
4. Inheritance Rights & Estate Planning
What, if any, events, transfers, or considerations will occur upon the death of each party during the marriage can be explicitly provided, rather than being left to the default law of intestate law; guarantees as to what will be provided by will or trust can be explicitly provided, or not.
5. Alimony and Spousal Support
Nevada law permits parties to provide what, if any, alimony might be paid in the event of divorce. It is possible to contract, in advance, to very specific terms of transfers of funds during the marriage or at its termination, eliminating or limiting alimony, or leaving it to a future divorce court to decide. However, any disposition that would leave one spouse in poverty and on public assistance is generally not enforceable.
6. Business Interests
Long-established law permits a claim to be made by a spouse to the increase in value of a pre-existing business due to the effort of either spouse during a marriage. That law can be altered to protect a family business, entirely or partially, or to otherwise provide, in advance, what if any interest in such a business would belong to either spouse, including its assets, income, and value.
7. Waivers and Promises
Parties can agree in advance what, if any, effect will be given to their premarital cohabitation, if any, the ownership of any existing property, the effect of future tax filings, etc.
8. Division of Assets in the Event of a Terminating Event
In the case of divorce or any other terminating event, this piece of the agreement outlines how assets, titled jointly, or in the name of one party or the other, will be divided.
9. Gifts, Confidentiality, and Other Provisions
There are a lot of details to consider. So the parties wish to provide that gifts require a writing of donative intent to make it easy to determine what was, and was not a gift? A two-edged sword, as it makes a divorce simpler, but makes actually living in a normal marital relationship more awkward. There are multiple alternatives. A confidentiality clause ensures that each spouse keeps the other’s confidence about the contents of their prenuptial agreement, and delineates penalties for violating this clause. There are many such alternatives, including whether some or all provisions of the agreement will ever “sunset” and turn into traditional default laws.
10. Customizing Your Prenuptial Agreement
A prenuptial agreement is nothing if not tailored to fit the couple it covers; the point is to have an agreement in place defining your rights and obligations, during marriage, upon any possible dissolution, and upon death, exactly the way you want it to be.
3 Items Not To Include In Your Prenuptial Agreement
The most comprehensive list of items to include in your prenuptial agreement checklist can always benefit from a brief discussion of what not to include, such as:
- Child custody and support: these cannot be included in a prenup because, if there is a divorce, the court will decide in favor of what is best for the child, regardless of what the prenuptial agreement states.
- Illegal or unfair activities: any provision in a prenuptial agreement that supports illegal or unfair activities will be struck down; additionally, these items may result in the agreement itself being invalidated.
- Lifestyle clauses: infidelity may be extremely painful, but nationally the law is mixed as to what kinds of clauses may or may not be included in an agreement governing the personal behavior of one or both parties during marriage. The case law regarding “lifestyle clauses” is mixed and highly variable from one place to another.
Working with a Lawyer to Draft Your Prenuptial Agreement
It’s important to take the creation of a prenuptial agreement seriously, as it is a legally binding document. Trust the expertise of the Willick Law Group to guide you through the process of drafting your checklist and your prenuptial agreement, to ensure the creation of an agreement tailor-made for yourself and your partner.
The Importance of an Up-to-Date Prenuptial Agreement
Keeping your prenuptial agreement up-to-date is vital to ensure its enforceability. It’s easy to go through major life events without updating your prenup, but here are a few of the reasons you should consider doing so:
- You’ve had children since you married…who are not covered by your agreement
- You no longer want a prenup: in this case, you can have it revoked if your partner agrees
- You have new property: acquisition of property by any means is a good reason to update your prenup, in order to outline your expectations in regard to that property.
Essentially, if you’ve gone through a major life-altering event, that should be a cue to look back at your agreement and make sure everything is exactly the way you want it to be.
Is Your Checklist Ready?
Take some time and consideration in creating the checklist for your prenuptial agreement. Entering into a life-altering union with another person demands respect and understanding. You owe it to yourself and your partner to take a methodical and careful approach.
The Willick Law Group will be here for you whenever you are ready to draft your prenuptial agreement. We leave no stone unturned in drafting and finalizing an agreement that works for you and your partnership. We look forward to working with you.