If you are soon to be married, there are many decisions to make. One is whether to create a marital contract between you and your future spouse.
Navigating the ins and outs of such contracts can be overwhelming, especially when you are new to creating one. Understanding what to include will go a long way toward simplifying the process.
In this article, we help explain what a marital contract does for couples and offer components you should consider adding.
What Is a Marital Contract?
A marital contract is a legal agreement between two individuals before marriage. This agreement outlines the both parties’ various rights and obligations in case of separation or divorce.
The contract’s contents can vary depending on the couple's preferences and circumstances. Generally, however, the agreement covers property distribution, spousal support, child support, and child custody.
A marital contract can be a useful tool for any couple. It helps establish fair terms for both parties. No one wants to think about divorce when entering a marriage, but we must all face the realities of life. The divorce rate in the U.S. hovers around 50%, and a marital contract can help protect your family should your marriage end.
Other Names for Marital Contracts
- Marriage Contract
- Domestic Contract
- Spousal Agreement
- Matrimonial Contract
- Prenuptial Agreement
- Premarital Agreement
- Antenuptial Agreement
- Cohabitation Agreement (for unmarried couples)
- Postnuptial Agreement (if signed after marriage)
Prenuptial vs. Postnuptial Agreements
When entering a marriage, you can create either a prenuptial agreement or a postnuptial agreement.
You sign a prenuptial before the wedding. Generally, prenups outline divorce or separation terms in case they are needed. These contracts are useful when one partner has significantly more wealth than the other, but anyone can use them. For instance, prenups also help protect spouses who have children from a previous relationship.
You sign a postnuptial agreement after the wedding. This document serves a purpose similar to a prenuptial agreement. It goes into effect if the couple chooses to separate or divorce, and it also outlines divorce or separation terms.
What to Put into Your Prenup
- Each spouse’s income and assets. Doing so can help protect each party's financial interests in the event of a divorce.
- Records of debts, ensuring each spouse is responsible for their own obligations and won’t take on those incurred by their partner.
- Taxes information, as the contract can specify who is responsible.
- Information about inheritance, which is particularly helpful for spouses who have children from a prior relationship or significant family assets.
- Any other information pertinent to a divorce or separation. This can include all forms of support, child custody, and so on.
The Benefits of Creating a Marital Agreement
Prenuptial contracts offer clear guidelines for handling financial matters and assets in a divorce or separation.
- By having a clear plan regarding finances, both parties can focus on healing and moving forward.
- Martical contracts help ensure that spouses are not left with financial instability or unexpected debts.
- A sound agreement helps mitigate potential conflict and stress an already emotionally charged process.
- They can offer protection for each individual. Many mistakenly assume that a prenup protects only the richer party. This is not so. If a martial agreement overly favors one partner, the court can throw it out.
Tips for Crafting an Effective Marital Contract
When crafting your marital agreement, consider all aspects of the marriage, including assets, debts, and financial responsibilities.
Additionally, discuss potential scenarios and outcomes that help ensure the agreement is fair and reasonable for both parties.
You should also seek a lawyer’s advice when authoring your prenup. They can help ensure its legal validity and accuracy.
Legal Considerations for Creating a Marital Contract
- Each party must enter into the contract voluntarily, without any coercion or pressure.
- The contract’s terms cannot be illegal or against public policy. For example, a marital contract cannot include provisions that waive a spouse's right to child support or dictate the terms of custody arrangements.
- You should openly disclose your assets, ensuring fairness and honesty in the document.
- You should include protections for your separate property. This includes property you owned before the marriage, gifts from people outside the marriage, and inheritances you receive during the marriage.
- You should discuss potential limitations on spousal support in the event of a divorce.
Law Office of Nicholas T. Exarhakis is here to help you build a sound marital agreement. If you are ready to negotiate terms with your future spouse, contact our firm online or call our office at (410) 593-0040.