Prenuptial agreements

by Barry Gordon of Gordon, Mond and Ott Attorneys at Law

While planning for tomorrow is often a challenge, given the length of some marriages and "marital arrangements", it is never too soon to consider a prenuptial agreement, a postnuptial agreement or a joint ownership agreement.

A prenuptial agreement is a contract entered into by two people who are planning to get married. Typically, the agreement will address what happens to financial assets in the event of death and divorce. This is especially important if one of the people to be married is wealthier than the other, older than the other, expecting a very large inheritance, entering into a second marriage or staying home while the other spouse is building a career.

In order to insure that a prenuptial agreement is enforceable, both parties should have legal counsel, and there must be full financial disclosure of all of the assets of the parties. It is also important that the agreement be signed as long before the wedding date as possible to prevent the argument by either party that they were coerced or under duress when signing it. Once done, the agreement may be enforceable even if it doesn???t seem "fair and reasonable" at the time of divorce as long as it is not deemed "unconscionable" at that time. You should consult your lawyer to determine what exactly that means, as it is likely to be redefined over time as new cases are decided. It is important, furthermore, that the parties at the same time redo their estate planning to insure that their wishes are properly carried out.

A postnuptial agreement is similar to a prenuptial agreement, except that it is signed after the parties are married. While it is thought that they should be enforceable in Massachusetts, the courts have not ruled definitively on the issue.

Finally, a joint ownership agreement is often used for couples living together who are not married. This is particularly important because the divorce laws do not apply to unmarried couples and therefore there are no state guidelines governing what happens if the couple splits up or one of them dies.

Marital (or non-marital) bliss is to be cherished, but that does not mean that one can???t both enjoy the moment and at the same time plan for the future.

Reprinted from WH Cornerstone Investments Newsletter.