A Brief Introduction of Marriage Agreement
Marriage Agreement, also known as prenuptial agreement or prenup, is defined as a written contract between two individuals signed before they get married. This premarital marriage settlement agreement allows couples to clearly outline the rights and obligations they owe to each other after the marriage and in case the marriage is dissolved.
The agreement typically allows the couple to choose and take control of the different legal rights they will acquire once they are married. The goal of this contract is to lay down how assets and incomes of the couple are to be treated during marriage and in case of separation or divorce.
Who Signs the Marriage Agreement?
A marriage agreement contract is signed by a couple that intends to marry shortly. The individuals can sign the agreement before they get married or enter into a civil union or domestic partnership. The agreement will be effective on the day of marriage. Neither party should be under a legal disability when signing the agreement.
Purpose of the Marriage Agreement
The primary purpose of a marriage contract is to lay down the rights and obligations the couple has towards each other during marriage and after separation or divorce. In a prenuptial agreement, the parties can lay down the rules and guidelines for dividing financial assets and debts in case the marriage ends in separation or divorce. Signing a prenup cuts down the possibility of future conflicts and confusion in the event of death or divorce since it clearly states how the handling of issues is to be done.
For example, Alex and Sasha are soon to be married. Sasha wants to ensure that the property rights of her child from a previous marriage are protected. In this instance, the couple can opt for a prenuptial agreement to safeguard the inheritance of Sasha’s child from a previous relationship.
Contents of the Marriage Agreement
Before drafting an actual contract, you need to understand what should be the contents of an agreement through a marriage contract sample. Ideally, the marriage settlement agreement must have the following components:
- Names and current residential addresses of prospective spouses.
- Effective Date for the Agreement.
- Legal representation: Both parties need to acknowledge that they are represented by separate legal counsel.
- Full and final disclosure of each party’s financial information concerning assets, income, debts, and liabilities.
- Ownership of property or real estate.
- Alimony, spousal support or maintenance.
- Child custody, support, and/or maintenance.
- Details of children from a previous marriage/s or relationship/s.
- Premarital property
- Property acquired during the course of the marriage.
- Ownership and financial state of business
- Waiver of rights to property, alimony, inheritance, or elective share.
- Housing arrangements.
- Household expenses.
- Death or Disability.
- Distribution of property during a divorce.
- State laws governing the Agreement.
- Severability.
- Dispute Resolution.
- Amendment or Revocation.
- Termination clause.
How to Draft a Marriage Agreement?
When deciding on the terms of the marriage agreement, it is important to refer to the relevant state laws to ensure its validity and enforcement. Here are some important points you need to bear in mind while drafting a marriage contract.
- The agreement needs to be in writing to be enforced.
- The parties must give full and final disclosure about their incomes and assets before the agreement is signed unless there is an informed waiver of full disclosure.
- The parties must agree to past, present, and future alimony along with payment of taxes.
- The agreement has to be witnessed by independent and separate witnesses.
- Both individuals must be given sufficient time to review the agreement before signing.
- The parties must be represented by separate attorneys.
Before signing the agreement and agreeing to the terms laid in it, both parties should separately and individually go through the provisions of the agreement and seek legal advice if needed. Both individuals can hire attorneys to negotiate the terms of the agreement on their behalf. In order for the agreement to be valid, both parties need to be in a position to freely negotiate the terms of the prenuptial agreement.
Finally, it is important to state that both parties must read and understand all the terms of the agreement completely before they sign the contract.
Benefits & Drawbacks of Marriage Agreement
Benefits:
- Protects separate property and family heirlooms that were already present with the individuals before the marriage.
- Protects the financial interests of the children.
- In case the marriage ends in a divorce, the prenuptial agreement not only reduces future conflict but also reduces the time required to settle the divorce.
- Distributes debts and liabilities in an agreeable manner.
- Since it clearly outlines the expectations, responsibilities, and liabilities of either party, it makes the settlement of divorce easier.
Drawbacks:
- It introduces a sense of distrust and pessimistic feelings towards the relationship.
- Certain state laws cover most of the issues that are separately covered by prenuptial agreements. In that case, it may be excessive and unnecessary.
- It could be used as a manipulative tool by either spouse, especially to the one who will be left with fewer assets.
- Even though you may outline the child custody in the marriage contract, eventually, if your spouse was to take you to court over it, the law would have the final say in matters of custody and child support.
- It can increase the burden and financial liability on either partner.
What Happens in Case of Violation?
Every marriage contract will contain a provision that lists down the remedies or actions to be taken when there is a breach of a contractual provision. One spouse may sue the other for breach of the agreement. The agreement clearly states the liability and enforcement of the duty for both parties in order to fulfill the obligations mentioned in the contract and in case of breach of such duty.
When a party breaches the agreement, the other party to the agreement may be entitled to relief or remedy. In the case of a material violation(1), the other party may rescind the contract. However, marital misconduct may not amount to a material breach of the agreement.
A number of couples are now opting to sign marriage agreements in order to protect their interests during and after the marriage. They are extremely useful in settling any disputes or conflicts if the marriage ends in divorce or when one spouse dies. It can help the parties amicably decide on what happens to the shared property and other marital assets. However, given the negative implication that it conveys, bringing up the topic of signing an agreement can be difficult for partners.