What is a Prenup?
Prenuptial agreements are contracts signed by both prospective spouses before marriage which set out in details certain terms and conditions of the prospective spouses’ future rights and obligations during the course and conclusion of a marriage. The most common elements included in prenuptial agreements are property division, spousal support, separate property determination, estate waivers, and debt allocation. These agreements can address any issue that would be considered a marital estate concern should an eventual divorce occur. However, they cannot impose terms upon a spouse that are against public policy such as child custody or child support. In addition , they cannot be used illegally or for an illegal purpose.
In a prenuptial agreement, a party gives up certain rights and/or priviledges under Utah law. The law allows the parties to determine the terms and conditions of their own divorce. For example, concerning the division of marital property, Utah divorce law generally affords spouses an equal share of the marital estate, subject to a court ordered equitable allocation. Whereas, if the parties deciding to marry enter into a prenuptial agreement, they voluntarily determine the value of the marital estate, how and when it will be distributed in the event of divorce, and most important who will be adversely affected as a result of a divorce.
Legal Prerequisites for Utah Prenups 101
To ensure that a prenuptial agreement is enforceable in Utah, it is crucial that the document adheres to several legal requirements. First and foremost, both parties must voluntarily enter into the agreement without any undue influence or coercion from the other party. This agreement must also be in writing and signed by both spouses to be enforceable.
Additionally, the agreement must meet the requirements of contract law, which requires an offer, acceptance, and consideration. Typically, the consideration for a prenuptial agreement is the mutual promises exchanged between the parties. However, it is important to detail exactly what each party will receive in the event of divorce or separation in order to avoid ambiguity and potential challenges down the line.
Furthermore, while there is no statutory requirement for a prenuptial agreement to be fair and equitable, the agreement must not be unconscionable or shocking to the conscience of the court. The Court may determine that an agreement is unconscionable if there is a significant disparity between the parties’ assets after the agreement is executed. For this reason, it is recommended that both parties fully disclose their financial situation, including all assets, debts, and income, prior to executing the agreement. Failure to do so may result in the agreement being set aside if it is later determined to be unconscionable.
Additionally, both parties should have sufficient time to review the agreement, ideally at least seven days prior to the marriage. This is particularly important if one spouse uses an attorney to draft the agreement and the other spouse does not. The spouse that did not have an attorney should have adequate time to seek legal advice.
Finally, while a judge does review prenuptial agreements in Utah, a judge may not refuse to enforce an agreement even if the judge does not believe the agreement is fair and equitable. Therefore, even the most lopsided agreement can still be enforceable if all of the technical requirements were met and both parties signed the agreement willingly.
Pros & Cons of a Prenup
- Asset Protection: One of the most significant benefits of a prenuptial agreement is that it offers asset protection for both you and your spouse. In the absence of a prenuptial agreement when a couple divorces, Utah contract law would determine how their property would be divided. If the parties drafted a prenuptial agreement before they were married, they would have more control over how their assets should be divided.
- Clarity: Having a prenuptial agreement in place where you provide for some form of spousal support or spousal maintenance can provide clarity and certainty as to the level of support which might be offered in the event of a divorce. It is fully within the parties control and does not leave the decision of deciding spousal support up to a court.
- Conflict Reduction: Prenuptial agreements may help reduce conflict when a couple decides to get a divorce. There may be less acrimony between the parties because each knows exactly what should happen to their property in the event of a divorce. This also helps simplify a divorce.
- Preserving Family Relationships: A prenuptial agreement may be beneficial to low-income spouses married to those who have higher incomes. In the absence of a prenuptial agreement, those who have lower incomes may have strained relationships with their wealthy spouses because of the perception that they are in the marriage for the purposes of gold-digging. It is beneficial to both parties if neither feel as if the other is only in the marriage for money.
Basic Issues Covered by Utah Prenups
A prenuptial agreement is a useful tool for individuals seeking to protect their property interests, spousal support, or even for those couples looking to address custody and parenting time issues for future children before they are born. Most Utah family law practitioners will tell you that the most typical items addressed in a prenuptial agreement are the division of property after divorce, the payment or non-payment of spousal support, and even provisions regarding debt and its division. The general public, however, has a misconception about prenuptial agreements, and its ability to regulate the parties’ interests and rights after divorce. Here, we address some of the most common issues addressed in Utah prenuptial agreements.
Property Division
Typically, a prenuptial agreement ignores any alimony provisions, as courts have discretion regarding alimony and cannot be forced to award neither a specific amount nor a property division otherwise separate without the opportunity for court review. A prenuptial agreement usually, however, addresses the simple division of property as being separate property or otherwise marital property subject to divorce provisions for equitable division. Although the law seems clear therefore regarding property division upon divorce, the definition of "separate" property or "marital" property may become complicated. For instance, may property obtained prior to marriage that is not used thereby the parties for support or otherwise become marital property if the parties reside together under the similar roof? While the answer to this issue is beyond the scope of this article, your prenuptial agreement may direct future statutory and case law in your favor and offer your property protection.
Alimony
Just like property, courts typically will not leave alimony terms up to a prenuptial agreement with regard to the amount and duration of same. However, your agreement can address the significant factors that a court must look at when awarding alimony as well as direct your goals toward an appropriate length of alimony.
Debt
Your prenuptial agreement can also address the payment of debt to prospective creditors, as well as how the payment shall occur. Typically, debt is addressed more clearly in the context of divorce rather than the marriage itself. Therefore, your prenuptial agreement should state the debt as a liability specifically tied to a particular party and not marital property. Your prenuptial agreement could also direct the parties to disclose the property, its value and debts prior to each new debt being addressed, much like the requirement of a financial affidavit in Utah.
Custody and Parenting Plans
Your agreement can usefully address the rights of parents as to custody, parenting time and other matters generally governed by the "best interest of a child" standard. You may explore the topic of travel (vacation destinations, affordable travel destinations, frequency of travel, etc.), nurseries or pre-schools, religious background, and parenting duties and responsibilities. Even the role of grandparents and extended family can be considered.
Limitations and Obstacles of a Prenup
Prenuptial agreements, while a powerful tool for financial and asset management in the face of divorce, are not without limitations and challenges.
The potential complexity of prenuptial agreements lays in the fact that – depending on your situation – they can be contested or considered unenforceable. However, these scenarios are not as likely for those who follow the specific steps and recommendations of a prenuptial agreement.
There are generally five situations where prenuptial agreements are unenforceable. These include:
- Uninformed consent. This means one party did not understand what he or she was signing when signing the prenuptial agreement
- Improper process. If there was a lack of disclosure of accurate financial information, if one party was pressured into signing, or if neither party had legal representation
- The agreement unreasonably favors one spouse. If there is any indication that the deal was brokered with intentional dishonesty , or the clause was designed as a tool to cheat the other spouse it will be unenforceable
- Noncompliance with state laws. Each state has its own terms and conditions regarding enforcing a prenuptial agreement, and you must know how your state approaches the prenuptial agreement process. The terms are not absolute so you always have the chance to negotiate important aspects of the agreement – as long as changes are followed legally.
- A substantial change in circumstances. If a period of five to 20 years lapse between signing the prenuptial contract and the filing of the divorce, it may be unenforceable. However, this is more likely in a states where the laws are strict about enforcing prenuptial agreements – others such as Utah and California tend to be more lenient when it comes to these issues.
It’s always beneficial to sit down with a prenuptial attorney to discuss the terms of your prenup before a signature is attached. Not only are the agreement terms often complex, but there are many small details to take into consideration.
Steps for Creating a Utah Premarital Agreement
When creating a prenuptial agreement in Utah, it is best to work with an experienced and knowledgeable attorney to ensure that the agreement is legally enforceable. The following steps will be helpful to better understand the process of creating a prenuptial agreement: Gather information. Initially you must prepare a full disclosure of all assets and income. You should begin by making a list of each of your assets (including real estate, bank accounts, credit lines, pensions, insurance policies, etc.): A good rule of thumb is if you have an asset, a source of income, or a possibility of debt it should be disclosed whether it belongs to you or belongs to your spouse. Consult with an experienced attorney. Discuss the current status of your financial situation, including all assets, debts, sources of income, etc., and how you wish to handle them should the marriage end. Discuss whether or not you plan to donate to charity while you are married or in your Will in the future. Your attorney will help you draw up a prenuptial agreement documenting the outcome of the options discussed previously. Expand on mutually agreeable terms. If you and your fiancée/fiancé are in agreement about each of your assets, debts, and sources of income, meaning what will happen to them after the marriage ends, you can make the decision to expand on the more minimal terms, considering the following: You should remain open to suggestions and comments from your fiancée/fiancé’s attorney, but also inquire about their level of experience in drafting prenuptial agreements. This will help determine whether or not you need to work with multiple attorneys during this process. Signing the prenuptial agreement. Once the prenuptial agreement has been drafted as agreed upon by both parties, your attorney will send the finished document to your fiancée/fiancé for review. Upon review, you will likely have one more meeting with your attorney to discuss any remaining questions or concerns about the agreement, and once both parties are satisfied with the terms, you will set a date for a meeting to execute the agreement. At the meeting, you and your future spouse will sign the agreement in front of a notary public, and the document should be notarized in order to be enforceable in the state of Utah.
When to Contact a Family Lawyer for a Prenup
The importance of consulting with a family lawyer in Utah for a prenuptial agreement cannot be understated. A family lawyer will ensure that the prenuptial agreement has been drafted according to state laws and will ensure that all necessary issues have been properly addressed. Many times, a person is not aware of all the various issues that even need to be discussed when negotiating a prenuptial agreement. Without having proper representation, a mistake could be made rendering the entire agreement invalid. Also , ensuring that each party has their own representing lawyer is a good way to ensure an agreement that is fair and impartial.
It is likely that your fiancé will already have his or her own lawyer. That is not a reason to avoid coming up with your own legal representation. It is important to understand that this is your marriage at stake. I have witnessed a few situations where the prenuptial agreement was poorly drafted or one party failed to disclose certain debt. This viewing of my clients as "the person getting half" often led to unhappiness with the entire agreement as well as an unfair agreement. If you want a fair division of property at divorce, you must give your fiancé the same. It is important to get this all negotiated and negotiated correctly before you get married.
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