Premarital Agreements (Prenups)

With the rise in the divorce rate over the last fifty years the premartial agreement (also called a prenuptial agreement or "prenup") has also grown in popularity. Given the commonly cited statistic that fifty percent of marriages now end in divorce, it is easy to see why prenups are increasingly being entered into in anticipation of marriage. A premarital agreement can help protect you and your assets should your marriage ultimately end in divorce.

While a premarital agreement is a smart decision, there are things to keep in mind when preparing to enter into such an agreement. Here are the requirements for a valid Mississippi Prenup:

4 Requirements of a Valid Marital Agreement:

1. Financial Disclosures - A full and fair disclosure of assets is of the utmost importance in drafting a valid prenup. Parties cannot agree as to how to divide assets if they don't know what assets they are going to be dividing. A complete financial statement should be filled out by both parties. The parties should then exchange financial statements so that each is aware of all assets. Failure to fully disclose one's assets and finances could result in an unenforceable premarital agreement.

2. Voluntariness - Each party must enter into the agreement voluntarily. Evidence of fraud, misrepresentation, or duress can be used to to contest that an agreement was entered into voluntarily. For example, an agreement entered into the night before, or the day of the wedding, may be found involuntary due to duress.

3. Fairness in Execution - There are a number of concerns related to whether or not an agreement has been fair in its execution, including timing, availability of independent counsel, adequate time to review the document, and the sophistication of the parties.

4. Unconscionability - an agreement that is overly one-sided, or would leave one spouse destitute, may be void as unconscionable.

Of course, simply knowing the required elements of a valid premarital agreement is only partially useful. The requirements set a base threshold for what kind of agreements courts are likely to find valid and enforceable. Of course, if you are are going to put in the time and expense of entering into a prenup, you want to know that you have done everything you can to ensure that the agreement is valid, enforceable, and likely to hold up to any challenge. Here are some ways you can accomplish that:

• Timing - You should be discussing the idea of a prenup in your conversations about marriage. Ideally, you would enter into the premarital agreement well in advance of the wedding day. A good rule of thumb is to meet with a family law attorney as soon as possible after getting engaged. You want to shoot to have the agreement finalized at least two months prior to your wedding date to avoid any claims of coercion or duress.
• Financial Disclosures - Complete and exchange full financial statements listing all income, assets, and liabilities and attach the statements to the agreement. The parties should exchange financial statements, and document the exchange by signing a document stating that they have each had an opportunity to review the other's financial statement. Depending on the complexity of the case, it may be wise to enlist the aid of accountants in preparing and reviewing financial disclosures.
• Independent Counsel - It is best if each party is represented by independent counsel. If each side has had the opportunity to review the agreement with the guidance of an attorney it will be less susceptible to a challenge of unfairness in execution.
• Film The Signing - It is best if you video record the signing of the agreement, having each party state that they had an opportunity to review the financial statements, meet with independent counsel, feel under no pressure to sign, and view the agreement as fair.
• Sign Ratifications After the Wedding - If your premarital agreement includes the waiver of pension benefits be sure to return to sign a ratification so that those provisions will be valid under federal law.

Premartial agreements can be used to help protect your assets, keep separate property separate, and ultimately reduce the cost of a divorce should the marriage fail. I know that for the couple in love, eagerly anticipating marriage, discussing a prenup is not very romantic. However, you should not let your romantic feelings cloud your judgement regarding your long term financial interest. If you're thinking about getting married, consult a divorce and family law attorney to discuss the possibility of a prenup.

Jonathan T. Day, Esq. is a divorce & family law attorney serving the Jackson, MS metro area. He wishes that every marriage would last forever, but knows that is often not the case - and when it is not the case, you'll be happy you have a prenup.