A premarital agreement (also called prenuptial agreement) is an agreement between prospective spouses made prior to marriage that becomes effective only when the parties marry. The agreement aims to determine each party’s property and support rights in the event of divorce. A premarital agreement can reduce conflict, avoid a court battle over the division of assets and liabilities, and determine spousal support if the couple divorces in the future.

The agreement must be in writing and signed by the parties to be enforceable. The parties can modify or terminate it based on a new or amended agreement, which must also be in writing and signed. 

Reasons to Sign a Premarital Agreement

There are several reasons why couples should consider a premarital agreement:

  • The parties may have experienced the emotional stress and financial cost of a previous divorce and wish to avoid a contested divorce from occurring should the marriage fail.
  • Older parties and parties who have been married previously may have assets they wish to protect upon remarriage.
  • The parties may wish to preserve separate assets for children they had from previous relationships or marriages.
  • A party may have acquired significant wealth through a business or investment and wants to ensure that property remains his or her separate property if the marriage fails.
  • The couple may want to decide what assets will be deemed separate or marital property to avoid asset classification disputes in the event of a separation, divorce, or death event.
  • A couple may also want to limit or waive rights to temporary or permanent spousal support in the event of divorce.
  • A couple may want to protect and safeguard their inheritances.

Pursuant to Virginia Code §20–150 of Virginia’s Premarital Agreement Act, the parties may enter into an agreement regarding the following:

  • Their rights and obligations regarding real estate, wherever located and whenever acquired and however held.
  • The right to buy, sell, use, lease, consume, abandon, exchange, transfer, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property. 
  • The disposition of property upon separation, marital dissolution, death, or the occurrence or non-occurrence of any event.
  • The making of a Last Will and Testament, a Trust, or other arrangement to carry out the provisions of the agreement or to provide financial support in the event of death.
  • Determine the rights in and disposition of death benefits from a life insurance policy, including the designation of beneficiaries.
  • Determine which state law will govern the construction of the agreement. 
  • Any other matters, including, but not limited to, their personal rights and obligations during the marriage or upon separation/divorce, which are not in violation of public policy or a statute that imposes a criminal penalty.

Unenforceable and Invalid Agreements

There are instances where premarital agreements will be considered unenforceable and are subject to being declared invalid by a court if a party proves the following:

  • A party did not execute the agreement voluntarily, including being under duress when the agreement was being negotiated and/or signed, or
  • The agreement was unconscionable when it was executed, and before the execution of the agreement, a party was not provided a fair and reasonable disclosure of the property or financial obligations of the other party, and the injured party did not voluntarily and expressly waive in writing the right to a full and fair disclosure of the property or financial obligations of the other party beyond the disclosure provided.

Importance of Having an Attorney Review a Premarital Agreement

Without careful and proper review by a qualified attorney, entering into a premarital agreement can have significant consequences. Even in marriages with few assets and lower income at the beginning of the marriage, there could be significant legal ramifications in the future based on events not properly considered. The contractual obligations of a signed premarital agreement can greatly impact a party.

It is recommended that premarital agreements be prepared by an attorney well in advance of any wedding date to avoid the appearance of undue pressure by either party. Having a premarital agreement reviewed by independent attorneys for each side may also avoid a challenge to the agreement in the future based on a claim that a party did not understand the terms and what he or she was giving up.

In the event that a couple does not have a premarital agreement and a divorce occurs, then the marital rights and obligations of the parties will be determined by the law of the jurisdiction where the divorce proceeds and the assets and debts will be divided pursuant to the property division statute of that jurisdiction. Likewise, spousal support will be determined by the spousal support laws of the state where the divorce proceeds.

A fairly negotiated premarital agreement can provide protection for both parties. If the parties get divorced or there is a death, it could help avoid wasting substantial time and money in the divorce or estate process.

The attorneys at Stiles Ewing Powers are experienced in helping engaged clients craft and/or critique premarital agreements in advance of a wedding. Contact an attorney at Stiles Ewing Powers today to schedule a consultation today.