Prenuptial agreements, often known as “prenups,” are legal contracts entered into by couples before marriage, detailing the disposition of assets in the event of divorce or death. When drafted correctly, they can provide clarity and protection. However, errors can render a prenup invalid or lead to unintended consequences. Below, we explore ten common errors and how you can steer clear of them.
1. Not Seeking Legal Representation
- Error: One or both parties forgoing legal counsel.
- Solution: Each party should hire their own attorney to ensure their interests are protected and the agreement is legally sound.
2. Waiting Too Long
- Error: Crafting a prenup too close to the wedding date.
- Solution: Start the process well in advance. Last-minute prenups can be seen as being made under duress, which can invalidate the agreement.
3. Including Non-Financial Requirements
- Error: Stipulating personal, non-financial matters, like household duties or frequency of visits to in-laws.
- Solution: Keep the agreement strictly financial. Non-financial clauses can make parts or the entirety of a prenup unenforceable.
4. Hiding Assets
- Error: Not disclosing all assets or underestimating their value.
- Solution: Full transparency is key. Hiding assets can lead to the prenup being invalidated.
5. Not Considering All Applicable Laws
- Error: Not being aware of state-specific laws on marital property.
- Solution: Research or ask your attorney about the laws in your state. Some states follow community property rules, while others adhere to equitable distribution.
6. Using Ambiguous Language
- Error: Utilizing unclear terms or conditions.
- Solution: Be explicit. Avoid ambiguity by ensuring that terms, conditions, and provisions are clear and specific.
7. Waiving Rights to Alimony
- Error: One party waiving their rights to spousal support.
- Solution: Approach this area with caution. Some jurisdictions don’t allow the waiving of alimony or will review the fairness of such clauses upon divorce.
8. Not Planning for Future Changes
- Error: Overlooking the possibility of changes in assets, debts, or children.
- Solution: Include provisions that address potential changes, such as the acquisition of new assets or the birth of children.
9. Not Reviewing the Agreement Periodically
- Error: Assuming that a prenup is a static document.
- Solution: Schedule regular reviews every few years or after major life events. As circumstances change, adjustments might be needed.
10. Assuming One-Size-Fits-All
- Error: Using a generic template without customization.
- Solution: Tailor your prenup to your unique situation. Off-the-shelf templates may not cater to specific needs or be comprehensive enough.
While prenups can seem unromantic, they are practical tools to protect both parties. By being aware of these common pitfalls and actively avoiding them, couples can create a robust, fair, and enforceable prenuptial agreement. Always consult with legal professionals to ensure your prenup stands firm against any future challenges.