Premarital Agreements and Marriage

When it comes to marriage, nothing is simple, especially if the marriage breaks down and the parties divorce. Now days, divorce can get complicated, with separate and marital property, and custody and visitation of any minor children. Due to such high divorce rates in this country, many couples are choosing to draft premarital agreements as a way to reduce complications in a dissolution as a way to protect their premarital assets and the care and custody of any children prior to the marriage. These premarital agreements, if drafted fairly, can determine how to separate property should the marriage dissolve or retains the rights of the surviving spouse in the event of death of one of the parties. Every state has different rules, is it a good idea for all states to adopt the Uniform Premarital Agreement Act (UPAA) (Ravdin, 2012)? Typically, premarital agreements were used by older spouses who were either widowed or divorced had considerable wealth and/or children. Until the case, Posner v. Posner, 233 So.2d 381 (Fla. 1970), most premarital agreements were usually unenforceable because they gave the courts the illusion that divorces were easy and attainable. See Gross v. Gross, 464 N.E.2d 500 (Ohio 1984). However, premarital agreements have gained popularity and courts will usually consider premarital agreements as long as tye are executed voluntarily and financially fair. (UPAA [section]6; Brown v. Brown, 26 So.3d 1222 (Ala. 2009); Colo. Rev. Stat. [section]14-2-301, et. Seq.) (Ravdin, 2012). Now days, it seems younger couples are entering into marriages with premarital agreements. There are three major reasons why they are having premarital agreements drafted. The first reason is that there may be an inheritance or family business from wealthy parents or grandparents where the prospective bride or groom may become apart of, and they may wish to keep the inheritance or family business in the family should the union end in divorce. Another reason could be that either party may have come from a divorced family and saw what the divorce did to them growing up and wish to seek solutions over how to solve property and custody disputes in the event of a divorce. And, finally, a third reason may be that younger people are delaying marriage in favor of careers that bring them considerable wealth and assets (Ravdin, 2012). In order for a premarital agreement to be valid, it must follow certain guidelines. The party seeking the premarital agreement must give the fiance(e) ample notice soon after the engagement, but before the wedding. Both parties must have the option to obtain counsel who can give legal advice regarding the terms of the premarital agreement. This leaves each party open to negotiations, without having to side with "take-it-or-leave-it" negotiations. Such negotiations must be planned well in advance of the wedding so each party can fully disclose assets and income. In the event that the premarital agreement shows any kind of unfairness, both parties should be open to negotiations where each has the advantage of economic security (Ravdin, 2012). There may be special concerns when it comes to premarital agreements. One is any future children that may come into the marriage and whether the wife and/or husband remains in the home to take care of the household and needs of the children and the husband and/or wife works outside the home. For example, in the case of Lane v. Lane, 202 S.W.3d 577 (Ky. 2006), the husband made a $1 million per year at the time of dissolution, making the premarital agreement financially unfair. The timeline of divorce for younger couples vs. older couples can also be of concern. In Martin v. Farber, 510 A.2d 608 (Md. Ct. Spec. App. 1986), resulted in leaving nothing to the husband after the wife died after a 40-year marriage (Ravdin, 2012). Still another concern that may occur is when a premarital agreement grossly affects a disadvantaged party after a pre-determined level of unfairness to a party. These situations can occur after a marriage ends in either divorce or death after 20 or 30 years and the party is unable to work, develops health problems, an inflated cash value on a fixed cash payment, or the wealthier spouse loses the business due to business failure or bad investments and is unable to meet the payments agreed upon in the premarital agreement. This happened in the case of Justus v. Justus, 581 N.E.2d 1265 (Ind. Ct. App. 1991), where the husband's failed business did not give him relief from an obligation of making cash payments in the premarital agreements (Ravdin, 2012). When younger couples enter into marriage with a premarital agreement, both party's reserve the right to seek spousal support should the marriage end in divorce. It seems only natural if one party is financially weaker, the weaker spouse should seek spousal support and the wealthier spouse waive the right. The weaker spouse can seek spousal support in two ways: a binding support arbitration claim, or in a limited support waiver. This situation would result until a child is born, or on the anniversary of the marriage. The right to seek spousal support would be reinstated to the weaker spouse in order to give him or her economic security to the spouse who left the work spouse to be the homemaker in the marriage (Ravdin, 2012). Premarital agreements also give each party the right to maintain separate property in the form of an inheritance, while sharing common marital property during the marriage. If, for some reason, a piece of separate property becomes singled out as marital property, such as interest in a business by the other spouse, this item could give the other spouse an equitable distribution claim into retirement benefits of the owner spouse. Even if the wealthier spouse retains the exclusive rights to property or assets in his or her name, the other spouse could have the same rights to the property or assets (Ravdin, 2012). In the event of death between one of the parties, under state law, the survivor spouse retains the rights to any pension plan survivor benefits as well as a share of the deceased spouse's estate as if there were no premarital agreement. Both parties can consider life insurance premiums that can be dependent upon the type of plan each party opts for. Or the parties can consider the "sunset" clause, when marital rights are restored after a certain number of years from either death or divorce as if a premarital agreement never existed. A good premarital agreement will consider the needs and interests of both parties involved in the agreement. A premarital agreement must also have full disclosure of assets and income between the parties. It must also include a schedule of each party's assets and debts, each parties federal and state income tax returns for the current year and any required years, each parties income and expense declaration, and any non-privileged documents in the possession or control of either party or their attorney that is related to negotiations and preparations of the agreements that has not been produced (Ravdin, 2012). After reviewing and researching the material for premarital agreements, it would be in the best interest for all states to adopt the Uniform Premarital Agreement Act (UPAA). In an era where half of all marriages seem to end in divorce, couples entering into marriage where there is considerable wealth and/or children should have the right to draft premarital agreements in order to end disputes such as separate or marital property and the care and custody of children either from previous marriages or children born during the marriage. I am in complete support of all states adopting the UPAA. References Ravdin, L.J. (2012). Premarital Agreements and the Young Couple. American Journal of Family Law. 26(2), 77.