At what point can a prenup be triggered?
A Prenuptial Agreement modifies the usual laws that impact married couples when they separate or divorce. A prenup can also address issues that arise during the marriage. Some rules may take effect as soon as the parties get married. Others might not matter until certain events occur, or the couple separates or divorces.
Rules that take effect on the wedding day
A prenup can define who owns property during the marriage and often becomes binding once the couple is married. Some states in the U.S. treat property gained during a marriage as jointly owned marital property or community property. Property that a spouse owned before getting married is their separate property.
If a spouse owns separate property, it is usually best to avoid mixing it with any marital or community property if the spouse wants to keep it separately owned. Not doing so can turn separate property into community property. For example, if you own a house before the marriage, that home is separate property. If your spouse helps pay the mortgage or to improve the house, such as by spending money on that separate property from the couple’s joint bank account, it could stop being separate property over time. If you sell the home to buy a new home together, your separate gains may become marital property when invested in the new jointly owned home.
It's a good idea to know that spouses may use a prenup to keep certain property separate throughout the marriage. These types of rules can be useful when:
- One or both spouses have complex finances, such as major investments in stocks, real estate, cryptocurrency, or other assets.
- One or both spouses own their own business.
- One or both spouses have large amounts of debt, such as student loans or credit card debt.
- One or both spouses have children from a previous relationship, and they have support obligations or want to set aside part of their separate property for their children.
Prenups may also address certain actions like infidelity or drug use. How effective or enforceable these types of prenup conditions are varies from state to state. You may want to review whether non-financial or lifestyle terms are appropriate for you with a lawyer.
Rules that take effect later
A prenup may also include terms that do not take effect right away. These rules must state when they start working in clear terms. Perhaps the most common event that triggers these types of rules in a prenup is a divorce filing or separation. A prenup may also be part of the spouses’ estate plans, so a spouse’s death, or medical issues, may trigger certain terms.
If one spouse files for divorce, a prenup may decide:
- What assets remain separate property.
- A certain amount or percentage of marital property that may go to one spouse.
- How to divide responsibility for debts taken on during the marriage.
- Whether or not either spouse may receive alimony, or support payments, and if so, in what amount and for how long.
Don't forget that courts might take a very close look at any rule that says support payments are not required.
Prenups can also be part of the estate planning process. A prenup can state that one spouse holds the right to give away certain assets in their Last Will and Testament. For example, a spouse might have family heirlooms, a business, or other assets that they want to keep on their side of the family.
What can one spouse do if the other spouse breaks the prenup?
If one spouse breaks the prenup, the other spouse’s rights largely depend on the terms of the prenup itself. Taking action, however, requires careful consideration. After all, marriage is not like any other type of contract, agreement, or partnership. Although violating a prenup is, in essence, breaking a contract, suing your spouse may not be the best course of action. Most of the time, if there is an error in handling separate property or finances, that error can just be fixed and documented. During a divorce, if one spouse violated the terms of the prenup, or mixed separate and marital property, then it may be worthwhile to ask a lawyer or forensic accountant to help untangle the assets.
A prenup may include specific penalties for certain violations, but these typically only apply during a divorce or separation. It might state that the parties will split all marital property 50/50 in a divorce unless one spouse has an affair. If an affair happens, the other spouse might get more property, or not be entitled to alimony. This assumes, of course, that only one spouse broke the prenup. Also, these types of terms are not always enforceable.
What are common mistakes people make when using a prenup?
Simple money management errors may create serious, yet unintentional, problems with a prenup. That's why it's a good idea to make sure the terms of the agreement are clearly defined and followed. This usually involves keeping separate property separately.
Additionally, rules that do not allow actions like adultery or illegal drug use might hold up in court, but rules about everyday actions, like household chores, might not. Also, spouses might have very different ideas of what actions are adultery. One spouse might think it involves sexual activity, while the other thinks that a single dinner date counts as adultery. If the spouses do not agree on these definitions before signing the prenup, it can lead to serious complications down the road if one partner invokes the agreement.
Also, using a prenup as leverage during marital arguments can be disastrous. A person who finds out that their spouse has broken the prenup may be sad or angry at first. Suppose a prenup bars both spouses from gambling or drinking too much, but then one spouse goes on a bender to Las Vegas. The other spouse might want to call for every penalty allowed by the prenup right away. However, it helps to keep in mind that this is a marriage, not just a contract. The spouse returning from Vegas might feel terrible and might want to make sure it never happens again. Moving too fast to invoke a prenup could push them both toward divorce before they have a chance to work out any issues.
What happens if I ignore our prenup’s rules about keeping separate property?
Ignoring a prenup’s rules about separate property, or other agreements in the prenup, could lead to disputes in a divorce case. The more one spouse ignores the need to keep their separate property separate, for example, the easier it could be for the other spouse to argue in a divorce case that their spouse wanted it to become marital property because of their spouse's actions. Simply put, if you mix separate and marital property together, it may get too mixed to untangle during a divorce.
Can a prenup be reversed?
State laws generally require prenups to meet strict requirements to be valid:
- The contract is in writing, and signed.
- Before signing the contract, both parties must reveal all their assets, income, and debts.
- Both parties have had the chance to have their own lawyer review the prenup.
- The contract must be fair and cannot contain any illegal rules.
Spouses may change a prenup after getting married as long as they agree in writing. They may also undo the prenup entirely. They could replace it with a new contract known as a Postnuptial Agreement, or postnup.
Also, a prenup can have a built-in expiration date, often called a sunset clause, after which the prenup no longer applies. For example, a prenup could state that it will expire on a certain date, like the couple’s 10th wedding anniversary, or when a certain event happens, such as the birth of their first child.
The death of a spouse may not automatically cancel a valid prenup. Depending on the terms, it may remain in effect as long as the other spouse is alive. If the prenup includes directions that conflict with the surviving spouse’s rights under state law, these conflicting terms usually cannot be enforced.
If you have more questions about Prenuptial Agreements, or getting married, reach out to a Rocket Lawyer network attorney for affordable legal advice.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.