Individuals who have property, other assets, liabilities, or children from another marriage should consider a prenuptial agreement. This agreement outlines the financial rights and responsibilities of each party during the marriage, and also lays out the distribution of property and assets in the event of a divorce. The preparation of a prenup is a process that needs to be given careful consideration. The agreement can be easily set aside or canceled if it does not follow the rules laid out in the family law legislation. For this reason, you should watch out for the following mistakes when preparing a prenuptial agreement.
1. Creating Unfair Terms
Prenuptial agreements can be unfair when it comes to outlining the terms of property distribution during a divorce. People have a right to enter into unfair prenups as long as they are in agreement. However, incredibly unfair contracts can invite the scrutiny of a judge and cause the most favored party to lose in the court proceedings during a divorce. An example of a highly unfair agreement is where one partner walks away with all the property, pays child support, but does not provide spouse support. Such terms may not stand in court, especially if the marriage lasted for an extended period.
Before preparing your agreement, it is best to consult a family lawyer to see whether it will pass the unfairness test. Doing so will ensure that each party’s rights are taken care of in the event of a divorce and avoid unnecessary strife if the court fails to acknowledge the agreement.
2. Failure to Disclose All Financials
Most divorces today occur due to financial issues, and a prenup gives both parties an opportunity to disclose all their assets, liabilities, and property. The agreement will not be enforceable unless both sides come to it with clean hands and reveal everything they have. You should overcome the temptation of omitting some details or undervalue some assets. If you are not ready to declare all your wealth, it may be a good idea to avoid the prenup altogether.
Note that it is essential to outline how the assets purchased during the marriage are to be divided at the time of separation. Also, the prenuptial agreement should state that your spouse will waive entitlement to your assets no matter how much their value may go up in the future.
3. Failure to Seek Legal Help
Both partners need to have independent legal assistance during the preparation of a prenuptial agreement. You need an independent family lawyer to advise you, confirm the agreement, and explain the legal implications before you sign it. This will prevent instances where one during a separation, one of the spouses may claim that they had no idea what they were getting into legally. Such claims can nullify the agreement in court, and the “victim” partner will be more likely to win.
Avoid these grave mistakes when preparing a prenup as they can cost you your financial future in the event of a divorce. Also, find a family lawyer who can walk you through the entire process, draft the agreement by the law, and include clauses that will protect both parties from all aspects of the past, present, and future. For more information, the resources at Matrimonial Home may be helpful to you.