A pre-marital or prenuptial agreement can be an effective way to determine how each spouse's assets will be divided upon the dissolution of the marriage or distributed upon the death of a spouse.
For these types of agreements to be enforceable the following requirements must be met:
1. Voluntary. First, each party must voluntarily enter into the agreement. To satisfy this requirement, it is often wise for each spouse to seek independent legal counsel. This ensures that both parties are completely informed of their respective rights. It also helps both sides in understanding what the agreement means in the event of a separation, divorce or death.
2. Full Disclosure. Second, each party must make a full disclosure of all assets and liabilities. Without a full disclosure, it is impossible for one to enter the agreement voluntarily, because he or she does not know all that is being given up. The best way to achieve a full disclosure of assets is to compile an accurate list of all your real estate, vehicles, valuable tangible property, bank accounts, investment accounts, stocks, retirements and other property of value. Also included in this list should be liabilities — both secured and unsecured. This “disclosure of assets” can then be incorporated into the agreement. By incorporating it in the agreement, both parties are providing evidence of full disclosure.
Having a pre-marital or prenuptial agreement in place does not preclude the need for other estate planning documents such as a will or trust. It is important that any attorney drafting a will or trust be given a copy of the pre-marital agreement. The way the agreement is worded will have an impact on other estate planning documents. The documents must be used in conjunction to ensure your estate planning goals are met and that one does not negate or contradict the other.
For more information on incorporating your pre-martial agreement into your overall estate plan, please contact Stouffer Legal at 443-470-3599 in the Greater Baltimore area.