What is a Prenuptial Agreement?
A prenuptial agreement is a legally binding contract that a couple enters into before they get married. While the language might vary from one document to the next, the spirit playing in the background usually goes along the lines of defining the property each of you owns, how that property will be handled in the event of a divorce, and perhaps even some select provisions about spousal support or payment of attorney fees should the marriage fail. Woven into the fabric of a prenuptial agreement, is the idea that any kind of support you would provide to your spouse under some other set of rules will be eliminated or lessened, should you divorce. These rules are a little different from what will happen if there is no prenuptial agreement for a couple that has been married. And on its face, thins like that can seem unfair, but that is why it is important to understand what a prenuptial agreement does, what it does not do and why it is helpful to enter into one . The point of a prenuptial agreement is to attempt to avoid the costs that can result if there is a dissolution of the marriage. A prenuptial agreement will almost always be inexpensive compared to the amount of attorney fees you might incur if there is no prenuptial agreement and putting together a divorce case with major issues at play. Even more so, the time it will take you to go through a case that has significant issues at play can mean years of litigation that could have been avoided by taking the time to enter into a simple contract before there was a marriage. Within this article, we will talk about not only the purpose behind a prenuptial agreement, but the legal parameters that govern them. If you have specific questions about a particular provision, it is wise to receive the advice of a family law attorney.
Requirements in Washington
In Washington, prenuptial agreements are governed by the Uniform Premarital Agreement Act (UPAA) codified at RCW 26.18.220 et seq. Under the UPAA, a contractual agreement made by entering into a premarital contract is only valid if the following conditions are met: The agreement must be in writing; The agreement must be signed by both parties; The parties must voluntarily and freely enter into the agreement; There must be full and fair disclosure of all property and financial obligations; The spouse cannot be put under undue influence or force to sign the agreement; Neither spouse may materially benefit more than the other as a result of the agreement; The terms of the agreement must not be unconscionable; and Both spouses must have independent legal representation or voluntarily waived that right in writing. The above factors are not exclusive and it is possible for valid prenuptial agreement provisions to exist without adherence to all the conditions above. For example, a Washington court may decide, in the interest of equity, not to enforce a provision in a premarital agreement that places undue hardship on one party. The courts, however, are free to disallow enforcement of provisions not expressly covered by the above examples in the interest of equity.
How to Make a Prenuptial Agreement in Washington
The first step in creating a prenuptial agreement is to hire Seattle or Everett family law attorneys who have experience in crafting such contracts. It is recommended that you each retain separate legal counsel, preferably in the locality where concepts of "full and fair disclosure" and "unconscionability" have been adequately addressed. Although the drafting process occasionally involves both attorneys working together, in most cases this is highly unlikely. In other words, do not use the same lawyer for both of your needs; this could prove to be a conflict of interest.
Pursuant to Washington case law, no prenuptial agreement will stand up in court if either spouse’s attorney fails to disclose assets, income and debts, and material financial information in general. Each attorney has an ethical duty to ensure that his or her own client fully understands what the agreement is meant to do, and ensure that full and fair disclosure has taken place.
The actual drafting of the prenuptial agreement sometimes requires the parties’ attorneys to consult with a tax or financial planner. This process is in line with the "full and fair" disclosure and option of disclosure requirement. This consultation process is designed to ensure that the client understands what is fair as far as tax impacts, potential debt implications, a potential stay-at-home spouse’s future financial needs, etc.
Common Provisions and Issues
Washington state law requires that premarital agreements be in writing and signed by both parties. While an agreement may deviate from Washington law, it must be viewed generally as fair and equitable to both spouses. Certain provisions of the agreement deal with estate planning. For example, if there are children of a previous relationship, consideration should be given as to whether each party wants to designate the children from their previous relationship as beneficiaries under a will or a life insurance policy.
Apart from these provisions, one of the common provisions in a premarital agreement in Washington is the division of property and assets. It contains exceptions to the general rule of Washington state law that all property, either owned before or acquired during the marriage by gift or inheritance, will be the sole and exclusive property of the spouse who owns each item.
Another common provision in the agreement deals with the division of debts. Again, under Washington law, debts incurred during marriage are joint debts of the spouses. A common provision would designate specific debts as personal ones and also deal with allocation of debts incurred during the marriage.
Many couples are reluctant to talk about a provision in a premarital agreement concerning waiver of a claim against the other spouse for alimony or spousal maintenance. In Washington, a party’s obligation to support their spouse after dissolution of the marriage can be terminated by their premarital agreement, but it has to be done voluntarily. If a spouse does waive his or her rights to spousal support under the agreement, then he or she cannot seek spousal maintenance in the future. Whether or not this type of provision may be appropriate depends upon a wide range of factors, including the length of the marriage, the respective assets of the parties, and the likelihood that one spouse will be able to work and support him or herself.
Other issues deal with matters such as confidentiality, choice of law, a mediation or arbitration clause and indemnification provisions.
Modifying or Nullifying a Prenuptial Agreement
If you and your spouse-to-be decide to make changes to the terms of the agreement after it has been executed, you can amend the agreement using the same formalities needed to enter into it. This includes full disclosure of assets, voluntariness, and consideration. Alternatively, either party may seek to have the prenuptial agreement revoked.
Generally, you may revoke your prenuptial agreement by just signing a document that details the property that Will and Wont will each use as separate property. This is the approach available in most states.
However, under the Washington Uniform Premarital Agreement Act , spouses may only amend or rescind the agreement if the new terms are formally entered into in writing, signed by both parties.
The law also allows the parties to submit the amended agreement to any court for approval. The court will approve the amended agreement unless it finds from clear and convincing evidence that the requirements were not met.
Although the law may, in some cases, allow the court to modify some provisions in a prenuptial agreement, an amendment or revocation procedure is when review by the court becomes mandatory, and the law does not allow courts to modify the agreement.
Enforceability and Challenges of Prenuptial Agreements
Prenuptial agreements in Washington are generally enforced if they meet certain requirements and have been executed according to statutory provisions. First and foremost, the agreement must be entered into voluntarily by both parties, free of duress or coercion, and must be based on adequate and full disclosure of the financial situation of both parties. Washington case law indicates that while there is not a uniform "fairness" requirement for determining the overall fairness of a prenuptial agreement, it "should be the product of financial disclosure, disclosure of rights, and a waiver of those rights." Both parties should therefore have a reasonable knowledge or demonstration of an understanding of the property or financial obligations of the other.
However, prenuptial agreements are not beyond challenge in court. While an agreement may be deemed fair and voluntary upon execution, later situations not contemplated at the time of the agreement may render the agreement invalid. There are several grounds upon which a prenuptial agreement may be challenged or set aside, including:
- (1) That the party did not execute the agreement voluntarily;
- (2) That the agreement was the result of fraud, duress, mistake, or misrepresentation;
- (3) That the result of enforcement would lead to an unjust and unjustifiable hardship on the party who did not substantially cause the failure of the marriage; or
- (4) That in light of all the circumstances the agreement was unconscionable when it was executed or it became unconscionable on account of changed circumstances.
The Use of Mediation in Prenuptial Agreements
In some cases, parties may decide that they would prefer to use mediation as a way to create their prenuptial agreement. In Washington, mediation is a process by which the parties agree to participate in negotiations assisted by a neutral party who has been trained to provide facilitative and evaluative assistance to the parties. A mediator can play a crucial role in the negotiation of a prenuptial agreement. Through the mediation process, the parties can have more input into the creation of the agreement. They also can have some control over the timeline for the agreement, providing some comfort to them as they negotiate an agreement that addresses issues that are often hard to talk about in terms of their respective hopes and fears. The mediator will work with each side to identify their goals, their concerns and their bottom lines. While disputes may arise, the mediator can guide the parties to develop acceptable solutions to those disputes.
Recent decisions indicate that courts are more likely to enforce a prenup negotiated via mediation than one that is not. Also, a mediated agreement may have greater integrity because the parties are familiar with the process by which it was developed and have a sense of ownership and consensus. The mediator’s role in creating a prenup provides each party an opportunity to be heard in a neutral forum. Because the process of applying the law to the facts requires the lawyers to advocate zealously for the positions of their respective clients, the negotiation of a prenup would seem to be best done in private. Mediating the agreement helps to avoid the adversarial dynamic, giving both parties an equal say in its development.
Prenuptial agreements created through mediation demonstrate fairness and provide each party with a sense of satisfaction that their concerns have been addressed directly. The mediator can help the parties to focus on their priorities and reach a compromise that is satisfactory to each.
Frequently Asked Questions
How enforceable is my prenuptual agreement if we divorce? You cannot agree to a divorce in a pre-nup. You can only agree to the consequences of a divorce in the future. That being said, the courts will not set aside a prenuptial agreement in the absence of a showing that the terms are unfair. The standards a court abuses its discretion if it sets aside an otherwise valid agreement in the absence of a finding of fraud, duress, or unconscionable terms.
Shouldn’t I have my lawyer write the prenuptial agreement with my fiancé? It is not that you cannot use your lawyer to review the agreement and ensure you understand the terms. But, a prenuptial agreement is an agreement between both parties and should be negotiated. This is why we see all the prenuptial agreements in the public eye over the last few years become invalidated: From Britney Spears and Jason Allen Alexander to Khloe Kardashian and Lamar Odom, they all had prenuptial agreements drafted by high-powered , celebrity family lawyers, yet those agreements were set aside because – apparently – the agreement was not negotiated, the agree was deemed one-sided, and the lawyers were not used to negotiate the agreement.
What if we are already married and do not have a prenuptial agreement? This is a post-separation agreement. It is a contract between the parties made under specific circumstances, normally during the pendency of a divorce or legal separation. The rest of the rules for prenuptial agreements apply to postnuptial agreements as well.
I want to put some terms of my prenuptial agreement online and ask the internet if these terms are fair. Please don’t take the "Yelp" approach to a complicated legal question. What is fair to one person may not be fair to another, and without the proper advice, this process could lead you toward a path of misinformation rather than information. Further, you don’t want to reveal your strategic advantage before you start negotiations!