Prenuptial Agreements

prenuptThere is nothing more unromantic than the thought of a prenuptial agreement. Until recently, I felt that planning an exit strategy for something that was supposed to last until “death do us part” was a waste of time and money, and was a clear indication your heart really wasn’t in it.

Prenuptial agreements  are becoming more common in situations involving children of prior marriages and substantial assets acquired by either party prior to the marriage. The couple agree, prior to marriage, about their property rights instead of relying on the usual rules of law that a court would apply on a divorce or death.

Iowa courts treat and honor prenuptial agreements as they would any other legal contract; respecting the wishes of those making the agreement. If there was any uncertainty that the contract would be legally binding, some couples might not enter into marriage, fearing it would not be strictly enforced. A prenuptial agreement allows couples to plan their financial future based on the planned end results.  For couples entering into a second marriage, a prenuptial can settle questions about property distribution in the case of death or divorce.

In Iowa, any person challenging a prenuptial agreement has the burden to show that their waiver of rights was not performed knowingly or voluntarily. To enter into a prenuptial, the law requires a full disclosure of all material assets. It also requires that both parties enter into the agreement voluntarily; free of duress and undue influence, allowing time for counsel and understanding of the agreement. As with any contract, a prenuptial may be nullified in the case of fraud.

Once a prenuptial is signed, it should be viewed as enforceable throughout the marriage regardless of length or circumstances. Iowa Code Section 596.7 provides that premarital agreements may be revoked only by a written agreement signed by both parties or by a finding by the court that the agreement was not voluntarily executed or was unconscionable.

A prenuptial agreement is a legal document that is drawn up by a lawyer for a fee…a cost far less than the cost that comes with court and legal fees when a marriage ends due to divorce or death. Personally, I believe a prenuptial agreement would have helped me a great deal as the adult child trying to sort through the issues caused by a parent with Alzheimer’s and and his wife with diminished capacity.  ~Brenda Schmitt, Family Finance Field Specialist and adult child looking out for a parent’s best interest.

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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