When a couple decides to marry, their thoughts very naturally turn to happy things—like the well-wishes of family and friends, wedding planning, and dreams of a warm and romantic honeymoon destination. But before they marry, it’s prudent for each prospective spouse to consider his or her financial situation and whether it would be wise to enter into a prenuptial agreement.
A prenuptial agreement is a legally binding contract that is made in contemplation of marriage, meaning that two people negotiate and sign the agreement with a view toward what will happen when they marry. The agreement has to be signed before they get married. It lays out a plan for how the spouses will divide up their assets if they should happen to divorce or, sometimes, if one of them dies. Prenuptial agreements are concerned with the division of property, which is defined as any interest in real property (like land or buildings) or personal property (tangible objects like jewelry and automobiles or abstract objects like retirement accounts).
Prenuptial agreements have to be finalized before a marriage occurs. They become effective as soon as the parties are legally married. Prenuptial agreements are also known as premarital or ante nuptial agreements in some jurisdictions.
Who Should Get a Prenuptial Agreement?
If any of the following scenarios apply, couples should consider getting a prenuptial agreement:
• One or both spouses are bringing major debt into the marriage.
• One or both spouses are bringing property into the marriage.
• One spouse is much wealthier or poorer than the other.
• One or both spouses are remarrying.
• One or both spouses have children.
This list is non-exclusive. If you have any doubts about whether you should enter into a prenuptial agreement, contact an experienced Utah family Ascent law attorney for more advice.
What Issues Can a Prenuptial Agreement Cover?
Prenuptial agreements in Utah can include some or all of the following issues:
• the rights and obligations of each spouse regarding any property owned by one or both of them. It doesn’t matter where or when the property is located or acquired
• who has what rights to buy, sell, use, transfer, exchange, abandon, lease, use, assign, create a security interest in, mortgage, encumber (meaning, to take a loan against something), dispose of, or otherwise manage or control property
• the disposition (allocation) of property if one of the spouses dies or if the parties separate, divorce, or if some other event occurs
• rights to alimony
• rights to the death benefit from a life insurance policy if one spouse dies
• the choice of law that governs what state’s law will interpret and decide the case if a dispute arises about the prenuptial agreement, and
• any other matter that doesn’t violate Utah’s public policy or criminal laws.
Utah law specifically states that “the right of a child to support, health and medical provider expenses, medical insurance, and child care coverage may not be affected by a premarital agreement.” This means that premarital agreements can’t limit or cap the amount of child support that one parent would have to pay to the other in the event of a divorce and change in child custody. The reason for this is that the right to child support belongs to the child, not the parent. Child support money may technically be transferred by one parent to another, but the legal reality is that the money can only be used to support the child. Also, child support awards must be modified if financial circumstances change. Courts must award the amount of child support that is fair and reasonable under the circumstances, regardless of any prenuptial agreement by the parents.
Similarly, child custody can’t be decided in advance via a prenuptial agreement. This is because child custody awards can only be decided by family law judges, who have to look at the facts and circumstances of each unique case and render a decision based on the child’s best interests.
None of this means that a prenuptial agreement can’t contain an agreement about child support and custody. If the parties divorce and decide to abide by the terms of their prenuptial agreement, then they can self-enforce provisions about child custody and support. However, if they disagree and wind up in family court, a judge will give little to no consideration to what the prenuptial agreement says about these topics.
Finally, Utah law says that “parties to a premarital agreement may contract with respect to the modification or elimination of spousal support.” This means that a prenuptial agreement can include terms to establish the type, amount, and duration of alimony to be awarded if the spouses divorce, or they can even eliminate it altogether. However, if the alimony terms of a prenuptial agreement would result in one spouse becoming impoverished and becoming eligible for public assistance, the court will overlook the language of the agreement and order the other spouse to pay alimony to the extent necessary that the poorer spouse is no longer eligible for assistance.
How Can I Ensure my Prenuptial Agreement Is Enforceable in Utah?
In 1994 Utah adopted the Uniform Premarital Agreement Act (“UPAA”). The UPAA was initially developed in 1983 by the National Conference of Commissioners on Uniform State Laws in an attempt to harmonize the law surrounding prenuptial agreements and to ensure legal conformity across the fifty states. To date, most but not all states have adopted the UPAA.
The UPAA spells out what should be present in a legally enforceable prenuptial agreement, and these provisions have been adopted into Utah’s state laws. For a prenuptial agreement to be legally valid in Utah, all of the following requirements must be satisfied:
• The agreement has to be in writing – an oral agreement is not legally enforceable.
• The agreement does not have to be supported by consideration – “consideration” is something of value that each party gives to the other as a show of support for a contract.
• The agreement must have been written and signed “in contemplation of marriage,” meaning that the parties must have negotiated and signed the agreement with a view toward a definite and upcoming marriage.
Prenuptial agreements are legally unenforceable if any of the following statements are true:
• One of the spouses didn’t sign the agreement voluntarily.
• The agreement was fraudulent when it was executed (meaning, signed by both prospective spouses) and one or more of the following statements is true:
• One of the spouses failed to provide the other spouse with a fair and reasonable disclosure of all financial obligations and property owned.
• One of the spouses did not voluntarily and expressly waive, in writing, any right to said disclosure.
• One of the spouses did not, or could not reasonably have had, adequate knowledge of the other spouse’s property interests and financial obligations. Whether a prenuptial agreement is unenforceable is a matter of law that has to be decided by a judge.
Can I Change or Terminate a Prenuptial Agreement After Marriage?
Yes. After the parties are married, they can revise or even revoke the prenuptial agreement. No consideration is necessary to support this second agreement. Both parties simply have to agree and the new agreement must be in writing.
What Can and Cannot be Included in Prenuptial Agreements
While no one wants to think about divorce before they even get married, prenuptial agreements (or premarital agreements) are intended to set certain terms in place in case the marriage ends. For instance, an individual with an established family business may seek to protect those assets from the other party in the event of a divorce. However, there are certain limitations to what can be included in a prenuptial agreement.
Distinctions 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 (some states use “community property” laws, which often stipulate 50/50 asset splits). Upon separation by death or divorce, the court will separate all of the marital property according to the laws of the state. In order to avoid a court deciding what happens to your property attained during your marriage, you can use a prenuptial agreement.
Protections against the Other Spouse’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.
Provisions Providing 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.
Protections to 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.
Protections for Estate Plans
Directions for 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.
Descriptions of the Responsibilities of Spouses
There are numerous reasons for a prenuptial agreement. Below is a list of items commonly included in prenuptial agreements:
• Separate businesses
• 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 Cannot Be Included 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.
Waivers of Rights 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.
Provisions Encouraging DivorceDetails About Personal, Rather than Financial, Matters
A prenup can’t 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 non-financial 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.
Confused About What Can be Included in Prenuptial Agreements? Get Professional Legal Help
Prenuptial agreements can be beneficial for both parties, since they solidify the terms of a relationship and marriage before problems arise. But every prenup should get a thorough review by an attorney before they’re signed, since the cost of critical errors in the document could cost one or both of the parties later. Contact Ascent Law Attorneys today for some peace of mind.
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