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What Can and Cannot be Included in Prenuptial Agreements

What CAN be included in prenuptial agreements

Distinguish between separate and marital property

Each state has its own separate laws that govern what types of property constitute separate property and what types constitute marital property (often called "community property"). Upon separation by death or divorce, the court will separate all of the marital property evenly. In order to avoid a court deciding what happens to your property attained during your marriage, you can use a prenuptial agreement.

Protect one spouse from the other's debts

Without a prenup, creditors can go after the marital property even though only one spouse is the debtor. To avoid this, limit your debt liability in a prenuptial agreement.

Provide for children from previous relationships

If you have children from a previous relationship and you want to ensure that they inherit some of your property, you can use a prenup.

Keep family property in the family

If you have a family heirloom, family business, even a future inheritance, or other piece of property that you want to keep in your birth family, you can specify this in your prenup.

Protect your estate plan

Prenuptial agreements are only a part of ensuring that your estate plan is carried out how you see fit. Remember, that you must also create and secure other documents such as wills and living trusts.

Define property distribution upon divorce

Remember that your state has laws that govern who gets what in a divorce. With a prenup you can bypass a lot of these laws by agreeing yourselves on who will get what. While some states prohibit it, other states even allow you to decide whether you will be entitled to alimony or not. Check your state's law or with a family law attorney to clarify this issue when drafting the prenuptial agreement.

Detail what responsibilities you have during the marriage

There are numerous reasons for a prenuptial agreement. Below is a list of items commonly included in prenuptial agreements:

  • Separate business
  • Retirement benefits
  • Income, deductions, and claims for filing your tax returns
  • Management of household bills and expenses
  • Management of joint bank accounts, if any
  • Arrangement regarding investing in certain purchases or projects, like a house or business
  • Management of credit card spending and payments
  • Savings contributions
  • Property distribution to the survivor, including life insurance, in the event of death
  • Arranging putting one or the other through school
  • Settlement of potential disagreements, such as using mediation or arbitration

What can NOT be included in prenuptial agreements

State laws restrict what can and cannot be included in prenuptial agreements. Below is a list of things most states will not allow in prenuptial agreements:

Provisions detailing anything illegal

Every state prohibits you from including anything illegal in your prenuptial agreement. In fact, doing so can put the whole prenuptial document or parts of it at risk of being set aside.

Decisions regarding child support or child custody

A prenup cannot include child support or child custody issues. The court has the final say in calculating child support. The court determines child support based on a "best interest of the child" standard, with several factors at play. A court would never uphold a provision of a prenuptial agreement that dealt with child support, child custody, or visitation, because these are issues of public policy. The court retains the power to decide what is in the child's best interest and will not deny a child the right to financial support or the opportunity to have a relationship with a fit parent.

Waive your right to alimony

This is the most commonly struck down provision by courts. A few states strictly prohibit this. Other states look down on it and limit your ability to give up your alimony rights. Some states do allow alimony waivers. Be sure to check with your own state's laws.

Encourage divorce

Judges scrutinize prenuptial agreements in detail to look for anything that tends to offer a financial incentive for divorce. If a provision can be read to encourage divorce, the court will set it aside. Courts used to view any provision detailing how property would be divided as encouraging divorce, because society has an interest against divorce. This is why judges pay such close attention.

Make rules about personal, rather than financial matters

A prenup cannot include personal preferences, such as who has what chores, where to spend the holidays, whose name to use, details about child rearing, or what relationship to have with certain relatives. Prenuptial agreements are designed to address financially based issues. Any prevision discussing nonfinancial issues will not be upheld. Judges grow uncomfortable when they see private domestic matters included in a contract, and will often view the document as frivolous, striking it down. If you and your spouse do want to have an agreement about such things, do it in a separate document, with which the court will not have the power to intervene.
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