Prenuptial Agreements Overview
Marriage, among other things, is a financial union. Like any financial union, it is important to define your rights in that relationship and to protect your financial interests. That is the role that a prenuptial agreement plays.
A prenuptial agreement is a contract between two people who are about to marry that spells out how assets will be distributed in the event of divorce or death. It is imperative that each individual have a skilled attorney involved in the process since a poorly conceived and/or drafted prenuptial agreement may not only fail to protect your assets, but result in their loss. An excellent example is the case of New York Giants pro football player Michael Stahan.
In January of 2007, Michael Strahan was ordered by a court to pay his ex-wife $15.3 million -- more than half his net worth -- in keeping with the couple's prenuptial agreement. Under the agreement, Jean Strahan was entitled to 50 percent of their joint marital assets and 20 percent of his yearly income from each year they were married. Apparently, Michael failed to set aside any proceeds pursuant to the premarital agreement during the marriage. That was a product of poor advice. The court did not adopt the NFL star's argument that he wasn't responsible for the 20 percent because his wife failed to ask for it every year. The end result is a financial disaster that could have been avoided. Make no mistake, however, a prenuptial agreement is not just for the ultra wealthy. It is an accepted finanically planning tool at all levels tohelp define property interests and reduce litigation costs should a divorce occur.
Minnesota Prenuptial Agreements
In Minnesota a premarital
agreement may also be called an antenuptial agreement. The
terms are synonymous. Minnesota prenuptial or antenuptial
agreements refer to a contract between two persons planning to
marry which governs the rights and liabilities of the parties if
they should happen to get divorced or in the event one spouse
dies. In short, a prenuptial agreement determines the rights of
parties to property, responsibility for debt and may even
determine whether spousal maintenance (alimony) is paid.
Why Prenuptial Agreements are
A premarital agreement acts as a
safeguard for both you and your spouse-to-be. It protects your
assets and may prevent expensive and acrimonious litigation if a
divorce should occur by defining the rights and responsibilities
of the parties in advance. With today's divorce rate hovering
around 50%,a prenuptial agreement may be one of the most prudent
decisions in your life. This is particularly true for business
owners who may wish to preserve what they have worked so hard to
Prenuptial agreements governing
property settlements upon dissolution are valid in Minnesota.
Englund v. Englund, 286 Minn. 227, 230, 175 N.W.2d
461, 463 (1970); Hill v. Hill, 356 N.W.2d 49, 53
(Minn.Ct.App.1984), pet. for rev. denied, (Feb. 19,
1985). The current requirements for a valid antenuptial
agreement are contained in Minn. Stat. § 519.11 (1984).
Antenuptial agreements are enforceable if they are procedurally
and substantively fair. McKee-Johnson v. Johnson, 444
N.W.2d 259, 265 (Minn.1989). An antenuptial agreement is
procedurally fair if :
- there is a full and fair
disclosure of the earnings and property of each party, and
- the parties have had an
opportunity to consult with legal counsel of their own
choice. Minn.Stat.§ 519.11, subd. 1 (1998).
The agreement must also be:
- in writing;
- executed in
the presence of two witnesses; and
- acknowledged by the parties
before a person authorized to administer an oath. Minn.Stat.§
519.11, subd. 2 (1998).
In most cases prenuptial
agreements are upheld. It is only in cases where there was not
full disclosure or the agreement becomes substantively unfair at
the time of the divorce that Court's strike down the validity of
such agreements. An agreement may deemed substantively unfair
if the circumstances on which the agreement was based have
changed so drastically that enforcement would not comport with
the reasonable expectations of the parties at inception.
Prenuptial Agreements &
Courts most often find
antenuptial agreements substantively unfair with regard to
provisions seeking to limit or eliminate spousal maintenance
(alimony) payments. Minnesota Courts have ruled that there is
sound public policy rationale for not strictly enforcing such a
provisions which, even though entered into in good faith and
reasonable at the time of execution, may have become
unreasonable or unconscionable as to its application to the
spouse upon divorce. The Courts are essentially attempting to
prevent ex spouses from becoming wards of the state. If one
spouse's health and employability have greatly deteriorated
during a marriage, Courts may be reluctant to enforce the
maintenance provisions of an antenuptial agreement. Some cases
that have been decided:
Given the complexities of prenuptial agreements and the changing legal environment in which they are viewed and enforced, you should always consult with an attorney about your prenuptial agreement well in advance of your planned marriage.
- Invalidated an antenuptial
agreement which sought to preclude spousal maintenance where
the lesser earning spouse contracted a venereal disease from
he husband resulting in medical expenses;
- Invalidating an antenuptial
agreement which sought to preclude spousal maintenance where
the marriage was long term (more than 20 years) and the wife
had been out of the work force for some time and suffered
from an emotional disability. The trial court concluded
that unforeseen circumstances invalidated the antenuptial
agreement by rendering it unconscionable.
Our attorneys have a passion for winning that is only matched by our creative and professional representation. We are aggressive and we achieve results through flexibility and efficiency. For a confidential consultation call (612) 240.8005.
To Discuss Your Prenuptial Agreement call (612) 240.8005
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