Prenuptial Agreements: What are They and Do You Need One?
Prenuptial agreements are just what the name implies: They are contractual agreements that are entered into between prospective spouses prior to the date of their marriage. These contractual agreements can serve several purposes. The agreement can document the assets and debts of the respective parties that they are bringing into the marriage. The agreement can also alter state law as it applies to the ownership of marital property, characterization of marital property and the management of marital property during the marriage. Characterization is the term used to refer to the identification of whether property is community property or separate property.
Concepts that are important in understanding the effect of premarital agreements are marital property, community property and separate property. Marital Property is simply all property owned by either spouse. Community Property is all property that is acquired during marriage. This can be important because Community Property is what the Court will divide if a divorce is filed. Separate Property is property which is owned by either spouse which is not subject to division by the Court if a divorce is filed.
In addition to those basic concepts, there are additional concepts to make note of with respect to proving community property versus separate property at the time of a divorce. First, all marital property which exists at the time a divorce is filed is presumed to be community property unless proven to be separate property. Second, to prove that something is separate property, the proponent of the separate property argument must produce clear and convincing evidence to support their argument. Other considerations which relate to the blurring of the line between community property and separate property are whether the separate property and community property were comingled together, what happened to the income from the separate property, and whether the separate property was used in whole or in part to obtain other property or pay down debt related to other property.
As to whether you need to enter into a premarital agreement, the considerations regarding the answer to that question could be and are the subject of complete books. Suffice it to say that you should consult with a board certified family law attorney to consider your specific situation. The information provided in this article is simply meant to demonstrate the complexity of the situation and provide the reader with the knowledge to ask the question of whether a prenuptial agreement is needed.