A prenuptial agreement, or “prenup”, is a tool utilized by both parties to protect their individual rights, as well as obligations, in the event of a divorce. Moreover, prenups cover the distribution and handling of property, real and personal, marital and separate. For example, if one party owned a house prior to marriage, they are likely to include a provision stating:
- Which party will the property be retained by,
- Who will be responsible for the costs of maintenance of the property,
- How money obtained either through the selling or leasing of the property will be distributed between the parties.
Another use for prenuptial agreements is to protect future earnings. Although a party may not have any significant assets before or during the marriage, it doesn’t necessarily mean that they don’t expect to acquire significant assets in the future. With a prenup, the spouse can pre-emptively protect any earnings from their professional career in the event of a divorce. A good example could also be someone who expects to inherit or take over a “family business” prior to getting married, and so this planning in advance negates a possibility of that ownership being in jeopardy.
In order for the prenup to protect your future earnings and potentially gained assets, the prenup should be drafted by an experienced attorney, who knows how to correctly articulate what you want protected and preserved in the event of a divorce. The last thing you would want is for a vague and unclear prenup to be drafted and agreed upon, only for the judge to interpret it differently than you had planned. The prenup must be in writing and signed by both parties. The enforceability of a prenup is decided upon by the court, so long as the agreement was signed by both parties voluntarily, and the prenup is considered fair to both parties, it will be enforced.