PRENUPTIAL AGREEMents
Secure with each other, for a stronger future.
You’re planning for a wedding and at least one of you is interested in a premarital agreement, also called a prenuptial agreement. You and your fiancé likely have questions about prenuptial agreements as you wonder how they work, which laws apply, and if they are right for you. As you talk to each other about these kinds of contracts and you learn more about them, we hope that you both approach the topic with the following in mind: you want to be fair to each other, you are prepared to make full disclosures about your assets, you are willing to communicate about difficult financial matters, and you will each work with an attorney.
WHO SHOULD GET A PRENUPTIAL AGREEMENT?
The two future spouses should talk with each other and decide what is right for them. There is no easy way to know, objectively, if a prenuptial agreement is right for you. Bringing up such a topic with the other spouse may be uncomfortable and awkward. And, while you are promising to make a future life together in anticipation of marriage, it may be difficult to think about the breakdown of the relationship. Yet, if the agreement is fair and both parties enter into it willingly and with full knowledge of the circumstances, it may be helpful. The agreement can support your estate planning goals, protect separately-held property, reduce future conflicts, and establish guidelines for future matters.
WHAT DOES A PRENUPTIAL AGREEMENT COVER?
• Separation of finances
• Protecting a spouse from the debts of the other
• Providing for children from prior marriages
• Passing on family property to the descendants of one spouse or the other
• Defining the division of assets in case of divorce
• Clarifying the responsibilities of each spouse during the marriage
A prenuptial agreement cannot limit future payments of child support, or decide upon custody and visitation rights if the spouses were to divorce.
Matters to keep out of the agreement, because they are nonmonetary and therefore not binding in court, include: who is responsible for household chores, taking a spouse’s last name, deciding how to raise children.
IS A PRENUPTIAL AGREEMENT ENFORCEABLE?
A prenuptial agreement is a contract. Contracts entered into between two consenting adults are generally honored and enforceable. Yet, because this contract deals with married spouses and families it is often scrutinized by courts with more care. For a prenuptial agreement to survive scrutiny it should be entered into with fairness and full-disclosure from both parties as a primary goal. Each party should have separate attorneys, sufficient time to review the text of the agreement, and receive a full disclosure of assets and financial information from the other partner. If any of these aspects of the process are violated the agreement may be invalidated if a dispute arose between the spouses.
PRENUPTIAL AGREEMENTS AND YOUR ESTATE PLAN
A typical prenuptial agreement will establish agreed-upon divisions of expenses and responsibilities for the marriage, such as a 50/50 split of household expenses. Each spouse may also agree that the Will or Trust of the other spouse will be allowed to remain intact. The Will or Trust may distribute his or her estate to their own children, or others, and not to the surviving spouse. As described above, the agreement allows a spouse to give up certain marital rights they would receive under the law. Waiving spousal inheritance rights is a big step, so you should understand what you are fully entitled to before you place such a clause in the agreement. A full waiver is not the only option you can choose. A partial waiver, allowing each spouse to retain some of their election rights, is also possible. You can also agree to leave property to each other and bind the other to include specific provisions in your Will or Trust to that effect. By drafting a “Contract to make a Will” each spouse will ensure that the other’s estate plan includes provisions that favor them or provide property for them after they pass away.
“The future of your family is important to us. We look forward to counseling one of you so that you both can enter into the marriage with a clear understanding and goals for a successful relationship."
HELPFUL LINKS
Below are links to sites and articles about premarital agreements.
UPAA
The Uniform Premarital and Marital Agreements Act (UPAA) addresses the varying standards for these types of agreements that have led to conflicting laws, judgments, and uncertainty about enforcement as couples move from state to state.
Link: http://www.uniformlaws.org/Act.aspx?title=Premarital%20and%20Marital%20Agreements%20Act
Effective upon marriage
ORS 108.715 states that a premarital agreement becomes effective upon marriage.
Must be in writing!
ORS 108.705 states that a premarital agreement must be in writing, and signed by both parties, for it to be effective.