Getting married is a time for joy and excitement toward the future, and while we should live for our marriages, we should recognize that divorce is always a possibility as life goes on and people change. Because of this, some couples may want to look into crafting a marital property agreement with an attorney.
What is it?
Most commonly referred to as a prenuptial or postnuptial agreement, a marital property agreement is a contract between two spouses that outlines the agreed to division of the marital estate in the event of divorce and/or the death of a spouse. A couple may enter into a marital property agreement at any time; it doesn’t matter whether they are not married yet, but plan to be married soon, or have been married for twenty or more years. A marital property agreement is a lifetime binding contract between two spouses, meaning agreement to it cannot be revoked by either party at any time. It is possible to have a marital property agreement revoked by court order; however, a court order is difficult to obtain because certain conditions need to be met and proven, such as one of the parties agreed to it under duress or the agreement was not executed correctly.
There are three components to a marital property agreement that both parties sign: 1) Waiver of Disclosure of Financial Agreement; 2) Premarital or Postmarital Agreement; and 3) Property Agreement between Spouses. The Waiver of Disclosure of Financial Agreement certifies that both parties have received and thoroughly reviewed the Premarital or Postmarital Agreement, which includes a financial disclosure from both parties, and are henceforth waiving their right to any further financial disclosure from the other party. This document must be signed first. Then, the parties may sign the Premarital or Postmarital Agreement, which outlines exactly what the parties agree to regarding the marital estate. Last, the parties sign the Property Agreement between Spouses after they’ve either gotten married or executed the Postmarital Agreement.
Importantly, marital property agreements do not and cannot contain any provisions related to possession and access and/or conservatorship of any children of the marriage.
What is it for?
Since marital property agreements outline the manner in which the marital estate is to be divided, the divorce process is streamlined. Whether the marital property agreement addresses the entirety of the marital estate or just a portion of it, there will be less back and forth between the parties (and their attorneys) over who gets what because it has already been decided in a binding contract. This reduces the attorney’s fees the marital estate would otherwise incur during divorce litigation.
Additionally, marital property agreements can protect separate property of one of the spouses in the event of a divorce. For example, if one of the spouses owns their own business, and they’re worried about how a future divorce may impact that business, they can execute a marital property agreement that designates that business, and any income from it, as separate property.
Is it for you?
While marital property agreements are most common among couples who marry later in life or couples coming into the marriage with their own large separate estates, marital property agreements are customizable to each couples’ needs and desires. A couple can decide, prior to marriage, that they don’t want any community property to be created during the course of the marriage, or they can decide that all property gained during the marriage is community property except for one specific asset. It is fully up to them.
Should you have any questions or want to explore whether a marital property agreement is right for you and what your options are, please feel free to contact our office to set up a consultation with one of our attorneys.