Premarital and Post-Marital Agreements
Prenuptial, or premarital agreements, are contracts that are entered into by parties that anticipate marrying each other. A premarital agreement may serve a variety of purposes, including helping parties that will become spouses determine what would happen with their finances in the event of a separation, divorce or the death of either party. For example, parties to a premarital agreement can elect to divide their assets in a particular way upon divorce, or set a specific amount of alimony, or waive alimony.
A person may seek to enter into a premarital agreement prior to marriage for a variety of reasons. For example, premarital agreements are often sought if a person wants to protect assets that they owned prior to marriage, if a party will receive a large gift or inheritance, or where the party wants to ensure that future property acquired during the marriage will not be considered “marital” or joint property of the parties. Another reason that a party may be interested in a prenuptial agreement occurs when that party has a significant income compared to his or her spouse, and they want to limit the possible alimony liability they may face in the future by a Massachusetts court.
Additionally, premarital agreements may be used in an attempt to protect creditors from seeking to enforce debts that the party may have brought into the marriage.
Premarital agreements are “arms-length” transactions, which means that the parties to the agreement do not have particular fiduciary obligation to the other. As a result, it is important that the general rules of contract are followed, as well as the legal requirements associated with premarital agreements in Massachusetts. In the Commonwealth, parties to a premarital agreement must have ample time to consider the terms of a premarital agreement before signing. They cannot be pressured or put under duress to sign. They also have the right to have an independent attorney review the agreement and help explain it to them. AAML Fellows that deal with premarital agreements often have stringent policies to help ensure the agreement is entered into voluntarily, and that the agreement would be upheld as a valid contract at a later date. It is important to have competent legal advice before anyone enters into a prenuptial agreement.
Postnuptial or post-marital agreements are made after the parties are already married. Some particular differences between premarital and post-marital agreements include the duty of disclosure between the parties will be much higher once the parties marry, spouses may not be negotiating at “arms-length” given their marital relationship, and the parties cannot be contemplating divorce at the time of entering into the agreement.
Premarital and post-marital agreements often have a negative connotation. However, these contracts are useful tools that outline what each party should expect if they divorce, or if one party dies.
Massachusetts Fellows are well-versed in the art of negotiating and drafting premarital and post-marital agreements. For more information, click here to find a Fellow in your area. (Link)