Before two people decide to say, “I do,” some couples opt for a prenuptial agreement. This legally binding contract describes what each spouse is supposed to receive, should the marriage end in divorce. It can take into consideration the property brought into the marriage—and acquired during it.
Although a prenup is a legal document, there are some defensible grounds for revoking it. Here are four reasons why a prenup may not protect you:
1) No Written Agreement
In order to be enforced, prenuptial agreements must be signed by both parties. If the prenuptial document consists of ambiguous wording, it can be contested in court. Verbal agreements are not legally binding. The premarital agreement must always be in written form—with four signed copies, which are retained by each spouse and each party’s lawyer.
2) No Independent Counsel
With separate interests at stake, each spouse must be legally represented by his or her own legal counsel in order for a prenup to be valid. One attorney cannot represent both spouses’ interests.
It is each attorney’s responsibility to ensure that his or her client completely understands the prenuptial agreement (and all of its provisions) prior to voluntarily signing the document. Failure to do so can void the prenuptial agreement, should the marriage end in divorce.
On the mere grounds that a spouse recommended an attorney to his or her partner, some prenups have been deemed irrelevant by a court. Preferably, each spouse should seek his or her own counsel, and should be individually responsible for paying attorney fees.
3) Insufficient Time to Review
In the event that a spouse was not given enough time to consider the prenup before signing it, it may not be enforceable. For instance, if a spouse was intimidated or pressured into signing the prenup minutes before walking down the aisle, it may not be binding. Some states mandate a specific number of days—for the spouse receiving the prenup to read and review it.
A premarital agreement should be signed at least one month before the wedding. To err on the side of caution, the more time given, the better. It is then the recipient’s responsibility to carefully and thoroughly read the document (with his or her attorney present) to help guide and answer any questions that may arise.
4) False Financial Information
Prenups are only valid if both parties fully disclose their income, assets, and liabilities. If one spouse fails to provide accurate information, it can result in a prenuptial pitfall. All relevant information must be disclosed in the written document. Each spouse must know the extent of his or her partner’s finances before signing the agreement.
It is important for the couple to exchange current, individual net-worth statements. If a spouse lies about his or her assets, or only discloses part of them, a divorce court could terminate the prenuptial agreement. In several divorce cases, the court has ruled that a spouse was fraudulently induced into signing a prenup. Spouses should always avoid any fraud-related issues by fully disclosing financial information.
When the appropriate steps are followed, a prenuptial agreement allows each spouse to protect his or her assets and financial stability. Should a couple decide to untie the knot, the prenuptial agreement’s purpose is to eliminate any confusion when dividing assets.
However, without a written agreement, independent counsel, ample time, and the full disclosure of both parties, the prenup can very well be found invalid by a judge. By taking the necessary precautions, you can ensure that your prenuptial agreement is upheld.
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