Prenuptial Agreements: Planning Ahead
Prenuptial agreements, or premarital agreements in Utah, are often looked upon as buzz killers for romance. It can often appear selfish, especially if only one party wants the agreement or is in possession of a lot of assets.
However, prenuptial agreements can be seen in a more positive light if they are considered as financial planning tools. It may also strengthen the relationship because they require a full disclosure of assets and debts, and it opens communication regarding issues that may have otherwise been difficult to discuss.
The reality is that over 50% of marriage in the United States will fail, and the possibility of death of a spouse is unpredictable but always there. Premarital agreements can provide certainty and predictability during these difficult events such as death or divorce, when so much else in life is unstable and chaotic.
Utah Prenuptial Agreements
A premarital agreement in Utah is a contract between two people who plan to marry and becomes effective upon marriage. The agreement must be signed voluntarily by both parties. It can also be amended or revoked by written and signed agreement of both spouses;
Prenuptial agreements deal in the realm of assets and debts. They define what is separate property of each spouse, versus the marital property that together the spouses accumulate during the marriage. Prenups clearly set expectations for future inheritances as well as current and future business holdings, investments, insurance benefits and personal property.
Prenuptial agreements can also be used to address individual debts and clearly affix conditions and ownership to the premarital debt of either party.
Prenuptial Agreements for Mature Persons in New Marriages
In the case of mature adults who are choosing to re-marry and face the possibility of a blended family, premarital agreements can be a great financial and probate planning tool, to ensure that their hard earned assets and insurance benefits will go directly to their children upon divorce or death, rather than have to be split with new step-children.
Detailed financial planning in a prenup agreement
A well written prenuptial agreement between two people addresses the assets and debts that they wish to include. It may also address the assets and debts that they wish to share. Prenups are not a selfish tool where every asset MUST be segregated. Rather, it is up to each of the asset and debt holder and their mutually agreed decisions. No prenup is every the same as another.
In the state of Utah any property, assets and debts acquired during the marriage becomes marital property and can be equitably divided upon divorce. A premarital agreement does not mean that if one party holds all the assets before marriage, then the other spouse will be destitute during marriage. It simply establishes what is separate property and what is marital property. Conversations regarding financial contributions by both spouses upon marriage can help to set expectations and settle individual concerns about financial support and sharing of assets in the marriage.
Prenups and Alimony
Premarital agreements have the ability to decide in advance if alimony would be awarded to a spouse in the case of a divorce. A “sunset clause” can also be included which would make the provision on alimony (or any other) expire at a certain date or point in the marriage. For example, the agreement could be written so that a spouse may not get alimony in the event of a divorce before 5 years of marriage, but should the divorce last longer than 5 years, then the spouse is eligible for alimony.
In Utah, if a prenuptial contract restricts alimony in a way that makes the would-be recipient eligible for public assistance at separation or divorce, the other party may be required to pay enough support to prevent that eligibility, despite the agreement.
What a prenuptial agreement does not do
Premarital agreements do not address concerns regarding custody, support, health insurance or healthcare costs of any children in or outside the marriage. Such issues must be addressed through different avenues such as divorce decrees.
Legal help with a Utah prenuptial agreement
Having a prenuptial agreement in place can help you prepare financially and set you up for success, for better or for worse. Attorney Casey Hoyer of Hoyer Law in northern Utah can assist by providing legal counsel and enforceable premarital contracts. With years of experience in family law in Utah, Casey Hoyer can guide you through the process of protecting your assets in the event of divorce or death. Call (801) 901-0797 to set up a consultation.