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PRENUPTIAL AGREEMENTS

Prenuptial agreements are not just for the wealthy and famous anymore. As more and more people are married more than once, prenuptial agreements have become an important estate and financial planning tool.

Many considering marriage do not realize that they'll be pooling not only their salaries but also their 401(k) accounts, pension plans, and even the increased value of a home or business once a partner brings it into marriage. Prenuptial agreements are especially useful if you have children from a previous marriage or important heirlooms that you want to keep on your side of the family.

Suppose that you get remarried and both you and your spouse have children from a former marriage. You want your house to pass your children, but without proper planning and an agreement in place, your spouse could inherit the house and then pass it to their children when they die.

A prenuptial agreement allows a couple to override state laws governing how wealth is split up, but only if done correctly. Although this agreement is not the most endearing suggestion to make to an intended, it could be the most valuable.

The following are major factors to ensure the validity of a prenuptial agreement:

  • To be valid, prenuptial agreement must be in writing and signed by both spouses. A court will not enforce a verbal agreement.
  • A prenuptial agreement will be invalid if one spouse is pressured into signing that by the other spouse. It is a good idea to make sure the contract is signed at least 30 days before the wedding to avoid the appearance of coercion.
  • Both spouses must fully disclose all their assets and liabilities. If either spouse lies or omits information about his or her finances, the agreement will be invalid.
  • The agreement must contain no invalid provisions. Spouses can agree to most financial arrangements, but a prenuptial agreement that modifies child support obligations is illegal. Minnesota law says that a prenuptial agreement will not be enforceable if it is “substantially unfair” at the time of execution or at the time enforcement is sought.
  • Regardless of whether it is required by state law, it is a good idea for each spouse to seek the advice of separate attorneys before signing any prenuptial agreement.
  • Each spouse must be given a sufficient amount of time to read, understand, and consider the document before signing it.