Premarital Agreements

Most couples do not plan on getting divorced when they are planning their wedding. However, in some cases, a couple can greatly benefit from an agreement addressing how property should be divided after marriage in the event of divorce or in the event of the death of one or the other. A premarital agreement is a contract between individuals planning to marry. In addition to addressing property division and support alimony issues, they can address preserving one party’s inheritance for children from a prior marriage and can set out the property rights of the surviving spouse on the death of the other.

In addition to basic contract law, courts have developed a three part test to determine the validity of premarital agreements. They look to see if:

• It is fair and reasonable
• There was full disclosure of the other spouse’s worth
• The challenging party did in fact have a generally accurate knowledge of the other’s worth.

When executing a premarital agreement, a tax advisor should be consulted to determine the tax consequences of the agreement. Sometimes provisions included in a premarital agreement can result in unintended tax consequences to one or both parties.

If you are interested in more information regarding premarital agreements, please contact our office to schedule an appointment.