Many couples neglect the time preceding the marriage for another part of what a marriage is. It is a business merger as much as a familial and emotional merger. When you marry, you and your spouse are entitled to certain legal rights and responsibilities which will impact each other's financial reality as long as you are together, and in some instances, even after a divorce. Those legal rights and responsibilities remain even if, god forbid you both are at odds with one another in a divorce case. A prenuptial agreement is a premarital agreement designed to restore you both to the position you were in prior to the marriage and subsequently divorce. Individuals with adult children and large assets or those with multiple marriages between seem to be the individuals who frequently utilize prenuptial agreements.
Freely, Knowingly, in Good Faith and without Duress
A prenuptial agreement must be entered into freely, knowingly, in good faith, and without duress or undue influence. Some individuals have a hard time understanding that all financial assets must be disclosed. However, for a prenuptial agreement to be valid there must be a full disclosure of assets. Essentially each party must be given a clear idea of the nature, extent, and value of the other party's property and resources. A partial disclosure is not a full disclosure. Let's say hypothetically you have substantial assets but you have failed to disclosure a certain assets or accounts. The court is is very likely to find your prenuptial agreement unenforceable because of your omission. The same is true even if you are a wealthy real estate developer who owns several businesses and lives in a big house. It is not sufficient to disclose most, but not all of your assets. In one case, “[T]he fact that the intended [spouse] knows in a general way that the [other spouse] is reputed to be wealthy is not sufficient to satisfy the requirement of a full disclosure in making antenuptial contracts.” Baker v. Baker, 142 S.W.2d 737 (Tenn. Ct. App. 1940). A full disclosure of assets is critical to a valid prenuptial agreement.
Both individuals entering into a prenuptial agreement need plenty of time to have a full and fair chance to read and understand the prenuptial agreement and to meet with counsel. The wise decision is to have your prenuptial agreement drafted, reviewed, and executed far in advance of your wedding date. The factors a court employs in determining the validity and enforceability of a prenuptial agreement varies case by case depending on a number of factors including each party's sophistication, the apparent fairness or unfairness of the terms, and any other circumstances unique to the specific situation. In one case the husband presents the prenuptial agreement to the wife the day before the wedding. She reads, signs it, and then they divorce. At trial the divorce court sets aside the prenuptial agreement on the grounds the wife did not have a full and fair chance to understand to what she was reading and agreeing. Does one party to the transaction not understand English? Are you pressuring the other individual to sign? Was the prenuptial agreement made solely by the person you are marrying without any input from you? Those are factors a court can use to not enforce a prenuptial agreement. It completely depends on the facts in question. That is why you need a trusted family lawyer to draft your prenuptial agreement.
As a matter of my family law practice, I refuse to draft an antenuptial agreement for a client without a full itemized statement of all assets from both parties, preferably notarized by both, including an acknowledgment to be signed by each attorney confirming that he or she has reviewed the Agreement with his or her client, explained each provision, and that he or she believes that the client understands the terms of the Agreement.
In Tennessee if a spouse is left out of a Will, he or she can elect against the Will and receive a spousal share, the amount of which is contingent upon the length of marriage. An individual may waive all inheritance rights in an antenuptial agreement, including electing against a deceased spouse Will.
When a divorce court begins the process of rendering its order, it first classifies the types of properties involved with the parties as separate property and marital property. Each individual will receive his or her separate property and the court equitably divides the marital property. The criteria used in property classification is long and detailed. In a divorce without a prenuptial agreement, each party would receive his or her separate property. However, if a court finds the other spouse substantially contributed to that separate property's preservation and appreciation, then that increase in value and the income generated from it becomes marital property. A skilled family law attorney can draft a prenuptial agreement to ensure you or your fiancé will receive his or her own separate property's appreciation and the income generated from the same. It is important to note the income from and appreciation of certain assets such as certain retirement accounts and stock can be protected, but not the value accrued during the marriage through marital contributions. If an ERISA is involved, very special language and additional steps must be taken to allow the new spouse to waive it after the marriage ceremony.
Alimony is the financial support you or your spouse would pay the other in the event of separation and/or divorce. Limiting or prohibiting a spouse from receiving alimony is another reason individuals pursue a prenuptial agreement. Persons can limit their liability to pay the other alimony with one exception. Will the enforcement of an alimony waiver render that person a ‘public charge?' If the government is going to have to care for this person because he or she will receive no alimony a court is less likely to enforce that provision within the prenuptial agreement.
If you or your fiancé is interested in a prenuptial agreement give me a call at 615-893-8190 and we will schedule you a thorough and detailed case strategy session.
I am James M. Judkins and for a decade family law has been a big part of my practice. Located in the heart of Murfreesboro and in Smithville, Tennessee, I represent clients in family law situations all throughout Tennessee. Helping people successfully through the some of the most turbulent times of their lives gives me a great sense of accomplishment.
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Disclaimer: The information in this blog post (“post”) is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from James M. Judkins, attorney or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this blog without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient's state, country or other appropriate licensing jurisdiction.