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PRENUPTIAL AGREEMENTS — A WISE MOVE THE SECOND TIME AROUND

Because our last post  highlighted  a recent Wall Street Journal report about the skyrocketing divorce rate among baby boomers — especially those who have been divorced at least once before — we decided offer a quick primer on Connecticut’s Premarital Agreement Act.

Many people worry that premarital agreements — also know as prenuptial agreements and ante-nuptial agreements —  send the wrong message about commitment and generate conflict and an atmosphere of pessimism from the start of a marriage.

Regardless of your beliefs about the wisdom or morality of entering into prenuptial agreements at the beginning of a first marriage,  the stakes are often quite different when we choose to marry for a second time.  By then, both parties are likely to have amassed some assets of their own and, importantly, may have children whose future welfare could  be jeopardized in the absence of a prenuptial agreement.

If you do decide a prenuptial agreement is for you, it is important to do everything possible to assure that it is both fair and enforceable.  According to a comprehensive overview on the history and development of the law on prenuptial agreements published in 2007 in the William and Mary Journal of Women and the Law,  rules regarding the enforceability of prenuptial or premarital agreements vary considerably from state-to-state. According to the authors, prenups are not enforceable in England and in parts of Canada but instead simply serve as evidence of what the parties thought would be fair at the time the agreement was signed.

Connecticut’s Premarital Agreement Act goes a long way toward assuring that a carefully crafted agreement will ultimately be enforced by the court, but it also provides a number of requirements that must be met in order for a prenup to survive a challenge at the time of a divorce.

  • The agreement must have been entered into voluntarily.
  • The agreement must not appear to the court to have been unconscionable when it was executed or when it is sought to be enforced
  • Before signing the agreement, both parties must have been given a fair and reasonable disclosure of the amount, character and value of property, financial obligations and income of the other party
  • The party opposing enforcement must have been given a reasonable opportunity to consult with independent counsel
  • The terms of the agreement must not make it necessary for one of the parties to seek public assistance

In order for agreements to be honored at the time of a divorce it is not enough simply to recite that all of these requirements have been met.  For example, if one party can provide credible evidence that he or she was under duress at the time the agreement was signed, it will not be enough that the agreement, itself, provided that he or she was not.

The degree of specificity and complexity of premarital or prenuptial agreements  varies enormously.

Agreements may cover pre-marital property only or may deal, as well, with property acquired during the marriage. Parties can pre-determine spousal support rights, allocation of debts,  and much more. It is also typical for couples to agree that their premarital agreement will expire after a period of time or that rights to such things as spousal support and retirement benefits will increase in accordance with a pre-arranged schedule as the years pass.

One set of  issues that cannot be decided in advance by way of a premarital agreement has to do with the care, custody and support of children of the marriage.

As with most areas of contract law, there is no one-size-fits-all document. Instead, engaged couples should make every effort to learn what issues they may face in the event that the marriage ends either by divorce or by death, and to fashion an agreement that recognizes and accommodates each party’s  wishes and priorities regarding their own financial future and, in many cases, the financial future of their children and grandchildren.

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