Prenuptial Agreements (What, When, Why, & How)

Prenuptial agreements are contracts between a couple before they marry. All 50 states recognize them as of the early 1970s.

Most of the time a divorce attorney will help the couple write it out together or draft an agreement on behalf of one spouse.

Prenup Meaning

Prenup or prenuptial means “before marriage.” In everyday use, it is a shortened version of prenuptial agreement.

A prenuptial agreement is a contract a couple enters into before marriage. It divides assets and debts in case of death or divorce, although it usually applies in case of divorce.

While prenups are a buzzkill, when a couple agrees on how to divide property while still happy with each other, it can save them an enormous amount of time doing through the divorce court circus. Prenuptial agreements also save thousands of dollars that would otherwise pay a divorce attorney and court fees.

When is a Prenuptial Agreement Important?

Not every couple needs a prenup. If it’s the first marriage, there are no children, and few assets, then there is no reason to go through the extra pre-wedding work.

On the other hand, if any of the following applies to you or your spouse, discussing a prenuptial agreement might be a good idea.

  • Assets going into the marriage
  • Children from previous marriage or partner
  • Second or third marriage
  • Business ownership
  • Expectation of inheriting money or property

Nevada is an equal distribution state. That means that half of the community assets go to each spouse upon divorce.

For example, if you own a house and you continue to pay your mortgage with income earned after the marriage (community property) the house becomes a commingled asset. Commingled assets are also community property and are split 50/50 with your spouse upon divorce.

Are Prenuptial Agreements Enforced in Divorce Court?

Yes. The exception is when the judge finds defects in the negotiation of the agreement or content of the prenuptial agreement.

Decades ago, most states would not enforce prenuptial agreements. They felt such contracts were “in derogation of marriage.” Without the jargon, the courts felt the agreements went against the principle of being married “until death do us part.”

In the early 70s, many states began enforcing prenuptial agreements that were fair. Nevada followed suit in 1973 in Buettner v. Buettner.

As long as your prenuptial agreement seems reasonable, the judge will enforce it. Keep in mind they are heavily scrutinized for any suggestion of extreme unfairness to one spouse or pressure for one spouse to sign.

Why Draft a Prenup?

The most important reason to draft a prenup is to save you time and money if your marriage ends in divorce. Agreeing on a reasonable division of assets now (when you love each other) is awkward, but a cakewalk compared to what it could be when the bliss has worn off.

You know precisely how to divide things when you have a prenuptial agreement. Most couples say this brings a peace of mind. It also prevents exorbitant divorce attorney fees if you end up battling over assets.

Prenups are not romantic. Even broaching the subject is a buzzkill. Other people think it is bad luck to discuss the possibility of the end of a marriage in the detail a prenup requires before it has even taken off.

You have a lower chance of coming home to finding your house on fire than getting a divorce. But people buy home insurance to cover themselves just in case. A prenup is not giving up on your marriage. It’s just covering your bases in case something terrible happens, just like any insurance.

Prenup Law – What’s in the Agreement?

In 1989, Nevada adopted the Uniform Premarital Agreements Act (UPAA), which you can read in the Nevada Revised Statutes at Title 123A. Under the UPAA, parties to a prenuptial agreement are allowed to agree with regard to:

  • Rights of property which the parties already have or might acquire during the marriage;
  • Any rights to buy, sell, lease or mortgage such property;
  • The disposition of property upon separation, divorce, or death of one of the parties;
  • Alimony; and
  • Any other rights and obligations of the parties which are allowed to be governed by private contract, i.e., are not governed by statute

Separate property is the primary focus of most prenuptial agreements. If you are coming into a marriage with real estate, retirement accounts, or cash, you might want to keep these assets separate from your community property.

Divorce courts divide community property equally. Separate property stays with the spouse who owns it. A pre-nup often includes a waiver by both parties of any rights in property the other spouse acquired before the marriage. This is important if you who wish to preserve the assets they bring into a marriage.

Couples can also agree that property acquired by one partner after the marriage, which would ordinarily become community property, will remain the separate property of that spouse. For example, you might be halfway to earning a considerable bonus, stock options, or maybe a future book deal. By agreeing these assets are to remain separate property you limit this argument in court.

A pre-nup may include language about limiting alimony (aka spousal support) in the case of a divorce. We even see an increase in “fidelity clauses” affecting the spousal support. If a spouse has an affair, the spousal support can decrease or increase, depending on your wishes. However, if the elimination or modification of alimony for a spouse results in that spouse needing public assistance, a court may disregard this portion of the agreement.

Prenuptial agreements cannot cover two crucial subjects: child custody and child support. By Nevada law, a court must decide these matters based on the standard of the best interests of the child and specific factors at the time of the decision. A premarital agreement signed before children are born would be unable to discuss the future factors. So, any private agreement between the parties on these subjects will not be binding.

When are Prenups Not Enforced?

For any contract to be binding (whether it’s a contract between spouses or businesses or anybody else) both parties must enter knowingly and without any coercion, duress, or fraud. Because how close people are before they marry, courts are especially careful with prenup contracts.

Duress (aka Pressure)

Both spouses must sign the agreement voluntarily. If one party signs under duress, then the contract is not enforceable. Duress is the legal term for pressure.

Agreements are often executed under some type of pressure. That means not every kind of pressure counts as duress.

While threats of physical violence or blackmail would clearly constitute duress, time between signing the agreement and the wedding date is the most prominent culprit. Courts will void a pre-nup because the bride felt pressure to sign a pre-nup three days before the wedding. The typical cause being the emotional stress of having to cancel the wedding, and explain to hundreds of guests why they canceled the wedding. It’s not a gun to the head, but just as scary for some people.

The threat of calling off the wedding is not always enough to be duress. Most courts reason that a party has a legal right to call off a wedding at any time. The courts look for other factors such as the unavailability of legal counsel for one spouse, or a one-sided agreement.

Allow plenty of time to negotiate and draft an agreement. To avoid the issue of duress in the event of a divorce, allow several weeks for the process of negotiating and executing the agreement before the wedding. Starting the process more than a month in advance would be better. Each side should also consult their own divorce attorney.

Fair and Reasonable Disclosure

The UPAA (Uniform Premarital Agreement Act) requires that both parties be provided with a “fair and reasonable disclosure.” If you conceal assets or debts from your spouse while asking them to sign a prenup, then you can run into disclosure issues.

If the contract is fundamentally unfair (the legal term is “unconscionable”) to one spouse, then the state of Nevada may choose not to uphold it. Other states will enforce a one-sided prenuptial agreement so long as both people signed with full disclosure.

In the Fick case, the court invalidated the prenuptial agreement because it was unfair. According to the agreement, the wife would not receive any alimony.  It also gave the wife much less community property than she would have otherwise received under community property law.

Prenup After Marriage

You can get a prenup after marriage. The legal term is “post-nup” or “postnuptial agreement.” For many people, it is the better option. There is little to no duress because the wedding has already happened.

You have had time to understand each other’s finances separately and now that you are married. So proper disclosure becomes less of an issue too.

You can create one of these anytime. It is best to do it when you are both happy. If you need it later on, then you have it. If you never need it, that’s fine too. It’s a good reason to sit down and go over both of your assets and debts.

If you have any questions about prenuptial agreements that we didn’t answer, give us a call at (702) 914-0400. Our friendly team is happy to help.