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I get a lot of questions about prenuptial agreements. Usually the questions are about whether they are enforceable under Alabama divorce law (they are if certain requirements are met) and whether and why to have a prenup.
I recently came across a nice blog dedicated to prenuptial agreements. It is www.prenuptialagreements.org.
One of the better posts I found on the blog so far was titled 8 Reasons Why You Should Have a Prenup.
The 8 Important Reason pointed out in the blog are:
1. You are much wealthier than your partner. A prenuptial agreement can ensure that your partner is marrying you for who you are, and not for your money.
2. You earn much more than your partner. A prenuptial agreement can be used in many states to limit the amount of alimony that is payable.
3. You are remarrying. When you remarry, your legal and financial concerns are often very different than in your first marriage. You may have children from a previous marriage, support obligations, and own a home or other significant assets. A prenuptial agreement can ensure that when you pass away, your assets are distributed according to your wishes, and that neither your first family, nor your new family are cut off.
4. Your partner has a high debt load. If you are marrying someone with a significant debt load, and don’t want to be responsible for these debts if your marriage ends, then a prenuptial agreement can help ensure that this does not happen.
5. You own part of a business. Without a prenuptial agreement, when your marriage ends, your spouse could end up owning a share of your business. Your business partners may not want this to happen. A prenup can ensure that your spouse does not become an unwanted partner in your business.
6. To prevent your spouse from overturning your estate plan. A prenuptial agreement can ensure that you estate plan works, and, for instance, ensure that a specific heirloom remains in your family.
7. You are much poorer than your partner. Just as a prenuptial agreement can be used to protect a spouse who is well off, a prenup can also be used to ensure that the partner who is weaker financially is protected.
8. If you plan to quit your job to raise children. Quitting your job will negatively impact your income and your wealth. A prenuptial agreement can ensure that the financial burden of raising the children is shared fairly by both partners.
All of these are great reasons. If you think you should consider a prenuptial agreement, meet with a divorce and family law attorney in your area.
The Alabama Court of Civil Appeals recently held that a prenuptial agreement was valid, even though it was signed by the parties one day before their wedding and wife failed to read the entire document.
The court found that the wife was not prevented from reading the agreement, and that as a real estate agent she should have been familiar with the import of reading a legal document.
The Court apparently also found it important that the wife knew the husband was a “millionaire” before they married, and thus was aware of the general extent of his assets at the time she signed the agreement. Reportedly the wife attempted to seek legal advice, but when she was advised that her attorney was unavailable she declined to seek other counsel.
There are several lessons here: one is not to sign a prenuptial agreement on the day before your wedding. I can’t tell you how many of the people that come to retain me to help them with their prenuptial agreements that wait until the last minute. That is a terrible idea. The other lesson is to get legal counsel. In this case, the wife likely gave up significant legal rights. And, whether she was a real estate agent or not, she may not have fully appreciated the impact her signature had.
Fellow family law blogger, Jeffrey Lalloway of the California Divorce and Family Law Blog, recently concluded a series of posts on what to include in your prenuptial agreement.
It is a great series (as is his blog). I emphasize numbers 2 and 12 as these are two issues that, if properly addressed, can help ensure the validity of a prenuptial agreement in Alabama (i.e. full disclosure and representation by a lawyer for both parties).
Also, when reading, keep in mind that Alabama is not a community property state like California. Thus, some of the terminology might be different, though the issues regarding the divisibilty of property would be the same. And, I must admit, I’ve not had the prenuptial in which we included number 13 (but I have seen it come up in divorces before!)
Here are the first three items on his list (check out his blog for the remainder):
1. Decide how all of your debts will be handled. This includes those debts incurred before you are married and those incurred after you are married.
2. Make sure you disclose all of your assets, liabilities, sources of income, and any other potential future assets, such as gifts or inheritances.
3. Should you divorce or die, decide who will get your primary residence or any vacation homes.