An Indiana divorce can drain you of energy, emotion and dollars. Two potential ways to prevent or lessen those losses are prenuptial and postnuptial agreements. They are agreements made between the parties either before (prenuptial) or after (postnuptial) they’re married. These agreements can spell out how various issues (but not child custody or support) will be resolved in case the parties end their marriage.
Without one of these agreements, under Indiana law all property brought into a marriage or acquired during it is joined together and will be subject to division in a divorce. Under Kentucky law, property is deemed marital or nonmarital. The division of property starts with a presumption of an even split; then one party can argue that he or she deserves more and the other person should get less. In order to prevent this tug of war, the parties can discuss who should get what and execute one of these agreements.
Prenuptial or premarital agreements are contracts signed by those planning to marry or who are married and who want to establish their property rights during or after marriage. The prenuptial agreement goes into effect when the couple marries.
Couples with complicated finances should seriously consider creating one of these agreements. The more complex your situation, the more reasons the two of you may disagree as to what should happen in case of a divorce. If you have children from a prior relationship, you could ensure that you retain certain assets to support them if the marriage ends.
These agreements are often used by those with substantial assets to try to protect what they have. But, depending on your circumstances, one may be a good idea even if your assets are more modest. The less you have, the less you can afford to lose in case of a divorce.
A couple’s finances rarely include just assets and wealth. Often one or both have debt, whether that’s due to credit cards, business loans, car loans, student loans or a mortgage. An agreement can spell out who is responsible for what debt in case of a divorce.
These agreements can include:
- Each party’s rights concerning property owned by either of them
- What happens to property if there’s a separation, divorce or one party dies
- Whether one will receive maintenance after a divorce
- Whether one or both are required to create a will, trust or other arrangement to fulfill the agreement’s obligations
- Whether each party will receive the death benefit from the other’s life insurance policy
- Any other issues the parties want to cover, as long as the agreement complies with state law.
Just because the parties make a written agreement doesn’t mean it’s enforceable under state law. To be enforceable it must be in writing and signed by both parties. Both sides should be represented by their own attorneys during negotiations and when the agreements are drafted.
As with all contracts, judges normally aren’t eager to void pre- and postnuptial agreements. If the language isn’t clear and the parties disagree over the obligations and rights created by the agreement, a judge may look to other documents or testimony to determine what the parties intended.
An agreement may be invalidated if one spouse didn’t sign it voluntarily because of physical threats or was extorted into signing. A threat to call off or end the marriage won’t be enough; there needs to be an actual threat of physical or psychological harm.
Another ground not to enforce the agreement is if it was unconscionable when it was signed. This means it’s so unfair that it would be an injustice to enforce it. The agreement’s provisions would have to be extreme and one-sided in order for it to be unconscionable.
Whether you’re planning on marrying or are already married and think one of these agreements is worth considering, call us or contact Church, Langdon, Lopp, Banet Law online today so we can discuss your concerns confidentially during a consultation.