Premarital Agreement

A contract made in anticipation of marriage that specifies the rights and obligations of the parties. Such an agreement typically includes terms for property distribution in the event the marriage terminates.

A premarital agreement, also known as a prenuptial or antenuptial agreement, is a contract between two persons who intend to marry. All states recognize premarital agreements through statutes or court decisions.

A premarital agreement is an unusual contract. It is an agreement between marrying persons that, at least in part, contemplates the breakup of the marriage. The subject matter of the agreement is unique: no other contract can address such matters as CHILD CUSTODY, child education, and spousal maintenance. The relationship of the parties is special: the contract is made not by two parties operating at arm's length, but by two persons who are preparing to marry. The contract is enforceable without consideration or the exchange of value, whereas most contracts require consideration. Finally, the contract may not be enforced until years after it was first formed. Although they are exceptional, premarital agreements have become increasingly popular in the United States.

The practice of making premarital agreements is ancient. Marrying Jews have made marital contracts called ketubahs for more than two thousand years. The modern secular premarital agreements that exist in the United States can be traced back to sixteenth-century England. Many of the first premarital agreements were used by women as a way of protecting their own property. Until the nineteenth century, women were considered the property of their husbands, and what was the premarital property of a wife became the property of her husband. A premarital agreement became the only way for a woman contemplating marriage to retain control and possession of her own property.

Initially, the rights of women in premarital agreements were limited. Women had few contractual rights, and courts often struck down premarital agreements that favored women. This situation changed in the mid-to late nineteenth century, when states began to enact Married Women's Property Acts to protect women's property rights. After that time, the number of premarital agreements created in the United States steadily increased.

Premarital agreements can cover a variety of topics. The most common include property and financial support rights during and after marriage, personal rights and obligations of the couple during marriage, and the education and rearing of children to be born to the couple. A typical premarital agreement is used by one spouse or both spouses to keep PERSONAL PROPERTY and income separate during the marriage or to protect certain property before one spouse embarks on a risky investment or new career.

In the absence of a premarital agreement, statutes and the courts may control the property, financial, and child-rearing issues that face a divorcing couple. Under the property distribution laws in many states, a spouse who brings a large amount of cash, property, and other financial holdings to a marriage and makes them part of the marital estate (combining them with marital assets for the benefit of both parties) may lose much of that property to the other spouse upon DIVORCE. A spouse who brings substantially more money or property to a marriage may want a premarital agreement to protect some or all of those assets in the event the marriage fails.

Marrying couples have included a wide assortment of provisions in their premarital agreements. Some agreements identify who will wash dishes, who will dispose of trash, where the couple will shop, and what will occur in the event one spouse is unable to perform sexually. Couples are free to contract on any subject, as long as the agreement does not violate public policy or a criminal statute.

Some scholars and social critics argue that the premarital agreement itself is contrary to public policy. They maintain that government should promote marriage and that premarital agreements promote divorce because they anticipate divorce. Supporters counter that premarital agreements actually promote marriage because they give married couples the ability to fashion their own relationship.

The supporters of premarital agreements have won the argument. Courts in all states recognize that marriage is, in part, a business relationship and that couples should be free to remain autonomous within a marriage. Many states have adopted the Uniform Premarital Agreement Act (UPAA), a set of laws on premarital agreements approved by the Commissioners on Uniform State Laws. The UPAA provides a list of property-related items on which couples may agree. It also includes a provision allowing couples to agree on any matter, including their personal rights and obligations.

Although all states recognize premarital agreements, courts tend to closely examine premarital agreements that are challenged by one of the parties. In many states the spouse seeking enforcement of a premarital agreement has the burden of proving its validity. Few courts hesitate to strike terms that are contrary to public policy or unconscionably unfair to one of the parties. A court may strike down all or part of the agreement if one of the parties agreed to the terms as a result of FRAUD or duress. Courts closely examine asset lists and income schedules to ensure that the parties are being forthright with each other. Couples drafting premarital agreements must be careful to explain in detail any provisions that a court might consider unfair.

Courts may strike down all or part of a premarital agreement. To be upheld, the agreement

A sample premarital agreement

must have been procedurally and substantively fair at the time of execution, and it must be substantively fair at enforcement. Procedural fairness refers to the manner in which the contract was made. Both parties must give full and complete financial disclosure, and each party should have an opportunity to consult with his or her own lawyer. Although many jurisdictions allow one attorney to represent both parties to a premarital agreement, it is generally better for the parties to have separate counsel. Doing so prevents a later argument that the attorney for both parties was biased in favor of one side. It also gives a party who may be unsure about the agreement a chance to discuss it privately with a competent professional. Courts tend to be more comfortable with premarital agreements made by parties with separate counsel.

Substantive fairness means that the actual provisions in the agreement are fair to each party. Because a premarital agreement may be enforced many years after it was created, what seemed fair at the time of execution of the agreement may have become unfair by the time of its enforcement. Such a situation might arise where a wealthy person and a person of limited means married with the agreement that, in the event of a divorce, each would leave with what he or she brought to the marriage. If the marriage was brief, this arrangement may be upheld. However, if the marriage lasted many years and the spouse formerly of limited means invested substantial time and effort into advancing the couple's financial position, the agreement could later appear unfair.

Courts tend to closely scrutinize premarital agreements' provisions relating to children. Children have a special status under the law that gives them greater protection than adults receive, and many states prohibit couples from making premarital agreements that adversely affect a child's right to financial support. A court will strike down a provision that relates to any other important matter, such as a child's custody or education, if it is not in the best interests of the child.