Prenuptial Agreement


A prenuptial agreement is a contract that is entered into before the marriage takes place. This agreement can set forth what will happen to your and your spouse's assets and income in the unfortunate event of divorce, separation or death. Most importantly, a prenuptial agreement can preserve the nature of property in the event that the marriage ends. In other words, separate property can remain separate and not be subject to community property or equitable distribution laws upon the marriage ending. 
Prenuptial agreements are gaining in popularity. There are many reasons why. One reason is that individuals today are focusing on their careers at an early age and are getting married later on in their lives, after they have accumulated property and financial worth. Prenuptial agreements are also entered into when one partner has children from a former marriage and would like his or her separate property to go to their own children. 

Many prenuptial agreements are entered into simply because couples do not want the courts to dictate who gets what if the marriage should unfortunately end. The frustrations of a divorce can be tremendous to say the least. The greatest problem in most divorces is deciding how to divide your property and money. A few minutes planning upfront could save exhaustive hours, headaches, and tremendous financial hardships, should your marriage end. 

Whatever the reason, Certified Document Solutions can guide you through the process of creating a customized prenuptial agreement. Simply answer a few questions and we will take care of the rest.


Benefits of Prenuptials

The benefit of a prenuptial agreement cannot be understated. We have all heard stories about ugly divorce proceedings. However, most divorces do not end up in court, despite what you read and hear about. Only about 5% end up in court as an "ugly" battle. Why then would you need a prenuptial agreement? 

The answer is simple. Although most divorces do not end up in court, they can still be extremely costly. Most people believe in the communion of love, and overlook the fact that marriage is also a communion of property. However, everyone thinks of property if a marriage ends. 

Deciding who gets what is a painstaking problem that will take time, money, and headache to resolve if not planned for beforehand. Lawyers can charge an average of $200 an hour to solve these problems for you. A little time invested now can save you a tremendous amount of money and hassle if your marriage should unfortunately end. 

A prenuptial agreement primarily deals with couples who want to keep property separate and free from the courts distributing them upon a divorce. Any kind of property, such as a home, automobile, stocks, checking accounts, business ownerships, and personal belongings can be included in the agreement. Debts can also be categorized as separate property so that one spouse will not be liable for the debts of the other should the marriage dissolve.



Courts usually uphold prenuptial agreements unless one person shows:

1.     That the agreement is likely to promote divorce,

2.     That the agreement was written and signed with the intention of divorcing,

3.     That one party was forced into signing it, or

4.     That the agreement was created unfairly.

In addition, all prenuptial agreements should be based on full disclosure of assets and debts by both sides. If you do not fully disclose your financial position, the prenuptial agreement can be attacked by the courts on that basis. In addition, although you do not need an attorney to create and negotiate a prenuptial agreement, it is often a good idea to retain an attorney if the other spouse has retained one. 

Certain rules apply as to what can and cannot be in a prenuptial agreement. A law called the Uniform Pre-Marital Agreement Act provides guidelines for people entering prenuptial agreements. Certified Document Solutions’ prenuptial agreement follows these guidelines. States that have adopted the guidelines are:

  • Arizona
  • Arkansas
  • California
  • Hawaii
  • Illinois
  • Iowa
  • Kansas
  • Maine
  • Montana
  • Nevada
  • New Jersey
  • North Carolina
  • North Dakota
  • Oregon
  • Rhode Island
  • South Dakota
  • Texas
  • Virginia
Although not all states have adopted the standards, most states have accepted the validity of prenuptial agreements, including New York and Florida. In addition, some states have slightly modified the Act. For instance, in a few states, spouses cannot waive the right to court-mandated spousal support.

Community Property and Equitable Distribution

In order to understand what a prenuptial agreement can do, it is important to understand the concepts of community property and separate property. Community property is the rule of law followed in the following states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. All other states follow equitable distribution laws. 

One of the primary issues in a divorce is how to divide assets. In a community property state, the husband and wife are deemed to equally own all income and assets earned or acquired during the marriage. This means that both the husband and wife are deemed to equally own all money earned by either one of them during the marriage, even if only one spouse works. In addition, all property acquired during the marriage with "community" money is deemed to be owned equally by both the wife and husband, regardless of who purchased it. 

In a community property state, all debts contracted from the beginning of the marriage until the date of separation are community debts, and thus, each spouse is each equally liable for these debts. In most cases, this includes any unpaid balances on credit cards, home mortgages and automobile loan balances. 

In states that do not follow community property laws, property acquired during the marriage belong to the spouse who earned it, but in the event of divorce, the property will be divided between the spouses in a fair and equitable manner. This is known as "equitable distribution." There is no set rule in determining who receives what or how much, but a variety of factors are considered. For example, the court may look to the relative earnings contribution of the spouses, the value of the one spouse staying at home or raising the children, and the earning potential of each. Often, each spouse will receive between one-third to two-thirds of the marital property. 

Regardless of whether your state follows community property or equitable distribution laws, a prenuptial agreement lets you decide how marital property will be divided in the event of a divorce. For example, a prenuptial agreement can state that income earned during the marriage will belong to the spouse who earned it. In this sense, a prenuptial agreement can "over-ride" community property or equitable distribution laws.


Separate Property

It is important to note that the rules of community property and equitable distribution only apply to income and assets earned or acquired during the marriage. Both community property and equitable distribution states have the concept of separate property, which is everything that a husband and wife own separately. In most cases, separate property is:

1.     Anything owned prior to marriage,

2.     Anything inherited or received as a gift during the marriage, and

3.     Anything either spouse earned after the date of separation.


In the event of a divorce, separate property will not be divided. 

Similar to separate property, separate debts belong to one spouse. All debts incurred before marriage are separate debts. Thus, for example, educational loans or job training loans incurred before marriage are separate debts. 

One of the prime benefits of a prenuptial agreement is that separate property can be prevented from being accidentally re-classified as joint property, either due to co-mingling or because payments were made out of joint funds. Prenuptial agreements can be keep debts separate. For instance, if one spouse owes a large student loan, you can both agree to have that student loan as a separate debt, and thus, only one spouse would be liable for that debt upon a dissolution of marriage.


Child Support and Spousal Support 

No state allows couples to limit amounts for child support payments in a prenuptial agreement. Child support payments are provided by guidelines within each state. 

On the other hand, the issue of whether spousal support may be waived varies from state to state. States which follow the Uniform Pre-Marital Agreement Act permit a waiver of spousal support, but the laws on this topic are constantly changing. For example, until the California Supreme Court recently ruled that these types of waivers are enforceable, it was widely assumed that these waivers were not effective in California

In general, a blanket waiver is acceptable in many states, but specific spousal support agreements (for instance, that the wife will receive $2,000 per month in the event of divorce) are more problematic and can be difficult to uphold.

Certified Document Services (CDS) prepares legal documents for non-lawyers in their own legal actions. CDS offers no legal advice, recommendations, mediation or counseling under any circumstance. CDS are not Lawyers, are not employed by a Lawyer, cannot give any legal advice and our employees are not acting as your Attorney. CDS can give you general factual information pertaining to legal rights, procedures or options available to you in a legal matter when you are not represented by an attorney. CDS cannot give you specific advice, opinions or recommendations about your legal rights, remedies, defenses, or strategies.