Antenuptial Agreements: Not Just For the Rich and Famous
In Minnesota, couples may enter into agreements which determine what happens to their finances and property in the event that the marriage ends in divorce, separation, or in the event of the death of one of them. Such agreements are called antenuptial agreements (sometimes referred to as a prenuptial agreement or “prenup”).
In most instances, antenuptial agreements are used to protect assets an individual wants to keep separate from marital property, but these contracts can also be used to determine how marital debt will be paid off, how spousal maintenance will be structured, and what will happen to assets in the event that the spouse in whose name the assets are held predeceases the other spouse. Some people who have been previously married or have children from before the marriage wish to have an antenuptial agreement to protect and preserve their assets for those children. The purpose of an antenuptial agreement is not to define what will occur during the marriage.
The parties can be very creative in drafting an antenuptial agreement; however there are limitations. For one, a court is not bound to uphold provisions of an agreement which violate Minnesota law. Certain provisions of an antenuptial agreement, for example, who will have custody, the terms of visitation and/or child support, will be carefully scrutinized by a court at the time of separation and divorce to determine what is in the best interests of the children and whether the support provided is within the laws of Minnesota. Courts are free to ignore entire provisions of an agreement if those provisions are against the law or public policy.
There are some very important considerations before executing an antenuptial agreement. For one, be sure to have the agreement signed in advance of the wedding, but close enough in time so that the value of assets and debts are accurate. That said, the conversation with your soon-to-be-spouse about entering into an antenuptial agreement should happen as soon as possible to avoid any claims of coercion. The closer you get to the wedding day, the more likely a court could disregard all or part of the agreement if one party is pressured by a short timeline to sign. Never sign an antenuptial agreement the day of the wedding.
Second, a court can disregard all or part of an antenuptial agreement if there was fraud involved. If you ask your future spouse to sign an antenuptial agreement do not mislead him or her about your financial circumstances. That could be viewed as fraudulent.
Third, make sure your future spouse has a chance to consult with legal counsel of his or her own choice.
Finally, Make sure the agreement is fair. If a court thinks that the agreement was unfair at the time it was created, it may not be enforced.
Already married, but think an antenuptial agreement would have been a good idea? You can still enter into such an agreement (called a postnuptial agreement) if the agreement: (1) complies with the requirements for antenuptial agreements and Minnesota law; and (2) at the time of its execution each spouse is represented by separate legal counsel.
Postnuptial agreements may not determine the rights of any child of the spouses to child support from either spouse or rights of child custody or parenting time. Also, a postnuptial agreement is presumed unenforceable if either party commences an action for a legal separation or dissolution within two years of the date of its execution, unless it can be established that the agreement is fair and equitable.
In addition to these substantive requirements, there are important procedural requirements. For example, both “prenups” and “postnups” must be in writing, signed in the presence of two witnesses, and notarized.
This information is general in nature and should not be construed as tax or legal advice. Please consult your tax and/or legal advisor for guidance in your particular situation. The author can be reached at email@example.com or (507) 387-1115.