What are Premarital and Postnuptial Agreements?
Premarital and postnuptial agreements, also known as prenuptial agreements, antenuptial agreements, marital agreements, and reconciliation agreements, are legal contracts entered into by couples before or during their marriage, respectively. These agreements outline the how assets will be divided, as well as rights and obligations of each party in the event of a divorce, separation, or death. Such agreements have two primary purposes, namely (1) to provide certainty in determining the property with which each spouse will leave the marriage, and (2) to alter the property allocation which would, or might, result from the application of the law. Premarital agreements arise from the notion that “parties should be free, within broad limits, to choose the financial terms of their marriage.” Uniform Premarital and Marital Agreements Act, Prefatory Note.
Who Should Create a Premarital Agreement?
While there is a common notion that premarital agreements are only helpful for individuals with substantial assets, premarital agreements can be quite useful for all individuals. For example, if the couple later faces a divorce, an enforceable prenuptial or postnuptial agreement can help ensure a less contentious and less costly divorce process. In Indiana, prenuptial and postnuptial agreements are governed by the Indiana Code, specifically IC 31-11-3.
In Indiana, What Constitutes a Valid Prenuptial Agreement?
To form a valid prenuptial or postnuptial agreement in Indiana, certain factors must be met. First and foremost, the agreement must be in writing and signed by both parties. It is crucial that the agreement is entered into voluntarily, without any coercion or duress. Additionally, both parties must provide full and fair disclosure of their assets, debts, and financial obligations. This ensures that each party has a complete understanding of the other's financial situation before entering into the agreement.
What Does the Court Consider When Determining to Enforce a Prenuptial or Postnuptial Agreement?
The court considers several factors when deciding whether to enforce a prenuptial or postnuptial agreement. These factors include, but are not limited to:
1. The presence of independent legal representation: It is highly recommended that each party seeks independent legal counsel to review and advise them on the terms of the agreement. This helps ensure that both parties fully understand their rights and obligations.
2. The fairness and reasonableness of the agreement: The court will assess whether the terms of the agreement are fair and reasonable at the time of its execution. This includes considering the financial circumstances of each party, their respective contributions to the marriage, and any potential future changes in circumstances.
3. The absence of fraud, misrepresentation, or undue influence: The court will scrutinize the circumstances surrounding the execution of the agreement to ensure that neither party was deceived or coerced into signing it. If any fraudulent or coercive behavior is discovered, the court may refuse to enforce the agreement.
4. Compliance with statutory requirements: The court will examine whether the agreement complies with the requirements set forth in the Indiana Code, including the necessity of a written document and the voluntary nature of the agreement.
It is important to note that while prenuptial and postnuptial agreements are generally enforceable in Indiana, there are certain limitations. For example, the court may refuse to enforce provisions that violate public policy or that are unconscionable. Additionally, child custody and support matters cannot be predetermined or restricted by these agreements, as the court always prioritizes the best interest of the child.
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