Prenuptial agreement checklist is required to make a prenuptial agreement (sometimes known as a “prenup“) which is a legally enforceable contract that both spouses sign before getting married. In the case of a financial loss, the agreement covers each participant separately.
This contract lays out how the spouses will handle money in their marriage. Read this guide to learn how to go through this process properly.
What Is a Prenup Checklist?
A prenup checklist is a list of assets and debts that is drafted for a prenuptial agreement. Prenuptial agreements have developed throughout time, despite the fact that they have been in use for thousands of years. Since 2017, nearly half of the states in the United States (including Texas) have signed the Uniform Premarital Agreement Act.
Prenuptial Agreement Questionnaire
In civil procedures, the Act specifies criteria for interpreting prenuptial agreements. To avert this, each individual’s personal assets should be protected by a formal prenuptial agreement that specifies what is and isn’t common property.
One of the conditions for a prenuptial agreement is the creation of a list of assets and debts acquired before the marriage took place. You should also be mindful of any potential financial problems you may be having and inform your spouse about them. Read the following questions which need to be listed in a prenup checklist.
- Do you understand how your assets and liabilities will be divided in the event of a divorce?
- Will premarital liabilities and assets remain separate property, or will they be returned to the party who obtained them prior to marriage?
- Will you mix your separate property and marital property?
- Will one person’s assets be used to pay off the other’s debts?
- Would the other party be entitled to compensation, or will it be deemed a gift if this is the case?
- Will you utilise the premarital property to purchase a home that you and your partner will share?
- Would the other party be entitled to compensation, or will it be deemed a gift if this is the case?
Any assets acquired prior to your marriage to your fiancé are referred to as “premarital” assets. This can range from savings and brokerage accounts to pensions and retirement assets earned up to the wedding day as well as cars, jewelries, homes, or employee stock options.
Points To Include
The following are the important points to be kept in the checklist of the prenup:
– Debt Reduction
If one of the couples has accumulated debt before marriage, a prenuptial agreement can be utilised to shield the debt-free spouse from inheriting the debts of the other. If a formal prenuptial agreement is not in existence, the mutual property might be subject to creditors in case of the debt of one partner.
– Acquisition of Property During Marriage
Marital property is defined as property acquired during the marriage. Here are a few things to consider when it comes to property acquired during marriage:
- How are you going to handle the assets and income you’ve accumulated?
- Are they going to be shared equally?
- Will you utilise a different arrangement?
– Asset and Income Management
Some people prefer to spend, while others prefer to save. Opposites attract, and thus, generally, couples have different spending and saving styles.
However, in order to meet each other’s needs, you must first understand your partner’s goals and priorities. Here are a few questions to consider when it comes to income and asset management:
- Who is in charge of the household’s finances?
- Is the person in charge of the bank account the same person?
- Will you share financial management responsibilities or will one of you be in charge?
- Are they in control of major purchases as well?
- Is it required for either spouse to obtain permission before acquiring a high-end item such as a flat-screen television?
- Who will be responsible for paying the expenses in the house?
- Will you have individual bank accounts, joint bank accounts, or a combination of the two?
- Do your financial habits differ from your partner’s?
- Have you and your partner speak about your financial objectives and how you’ll both contribute?
- Have you spoken about your retirement plans and how you plan to save for them?
- Deciding who and how much to be paid if you or your partner owe child support or spousal maintenance from a prior marriage: Is it based on shared or separate income or assets?
- If you divorce or separate, do you or your partner wish to be compensated for those payments?
– Problems With Taxes, Debt, and Credit
Do you have a discussion with your partner regarding your credit score?
It is important to discuss with your partner topics regarding debt repayment and debt accumulation. When discussing new and old debt, consider the following questions:
- Do you or your partner have bad or no credit?
- Do you or your partner owe money to the IRS? How will you pay your liabilities if you do (separately, collectively, and from what account)?
– Non-monetary Contributions
What is your agreement on non-monetary contributions, such as managing the family home or raising children?
When deciding which roles each of you will play in the marriage, it’s critical to understand your partner’s and your own attitudes.
Here are some questions about contributions:
- How much money you’ll make or what kinds of jobs each of you will have
- Do you both anticipate a change in your jobs at some point?
- Is anyone employed in a hazardous occupation, such as a police officer or a firefighter, where you could become disabled?
- What would you think if your partner left a less lucrative job for a more personally rewarding one, such as teaching?
- Do you know when you’ll be able to retire? Until what age do you intend to work?
- Will you both work if you have children? Will one of the spouses stay at home?
- What if you both need to relocate to another state for work?
- What happens if either partner wishes to relocate closer to their family after having children?
– Maintenance for the Spouse
If necessary, spousal maintenance can be a part of your prenup.
The following are some spousal maintenance questions:
- Is there any restriction on the length, terms, or amount of spousal maintenance?
- Are you required to work and contribute to the household at the same time?
- What if one or both partners are unable to work due to unforeseen circumstances, such as if one of the spouses wishes to return to school?
The future is unpredictable. If you do not include spousal maintenance in your prenup, a financially weak spouse may be unable to support themselves.
– Family Presents
What if one of you receives a big monetary gift, such as a down payment on a house? Is it a loan or a gift?
The following are some questions about family gifts:
- Will it be a loan or a gift?
- Will the gift be considered separate property?
- Who will be obligated to repay the loan if the gift is a loan? Is formal documentation required if it is a loan?
– Returning Taxes
Married spouses can file jointly on their taxes, but they are not required to do so. Discuss taxation with your partner to determine whether you should file individually or together.
Questions about tax filing include:
- Will you file together or separately?
- Is there any tax debt on either partner’s part?
- Will both parties be held liable for any tax liability?
If your partner owes the IRS money, they can deduct it from your joint refund account.
– Alimony Rights Waiver
Prior to or after a divorce, the lower-earning spouse in some marriages may be entitled to alimony payments from the other spouse. Certain spousal support provisions in a valid prenuptial agreement can potentially waive a partner’s rights to a prenuptial agreement.
– Disablement or Death
If you had children from a prior marriage, you may want to form a new estate plan when you marry to guarantee that your estate is correctly handled if you become disabled or die.
Some questions concerning incapacity and death are as follows:
- Is there a chance that either partner’s children or other family members may inherit from them?
- Is life insurance available to anyone?
- Do you have any children or relatives who would inherit from you?
- Who will be the beneficiary of your pensions, annuities, IRAs, and other retirement accounts?
- If one of the partners dies, is the prenuptial agreement null and void?
- Is the surviving spouse capable of maintaining the same level of life as the deceased spouse?
- Will either partner be able to access funds immediately if the other dies?
- Will your surviving partner be able to keep the family home if you pass away?
- What if one of you were to become disabled?
- Would one of you being incapacitated alter your financial habits?
- Would you be prepared to assist your handicapped partner with your own money?
- Do you require long-term care or disability coverage?
– Each Spouse’s Financial Responsibilities
Write up a prenuptial agreement to define not just what happens to each partner’s assets if the marriage ends in divorce, but also what each partner’s financial duties are during the marriage. This covers who pays which expenses, how joint bank accounts are maintained, how each couple contributes to savings accounts, and how financial disagreements are settled.
– Points That Are Not Included in a Prenup Checklist
Here are several points that are not to be included in your prenup agreement for several reasons.
Child Support and Custody
Details concerning child custody concerns including visitation, religious upbringing, schooling, child support payments, and so on cannot be included in a prenuptial agreement. This is because a court will be faced with assessing what is best for the child or children in the case of a divorce.
Anything That Is Seen To Be Illegal or Unjust
Any clause in a prenuptial agreement that may be seen as endorsing or encouraging unlawful or unjust behaviour is null and invalid. This is especially crucial since adding these topics in the prenuptial agreement might declare it null and invalid.
Drafting a Prenuptial Agreement
Both parties must complete a list of existing income, debts, assets, and any health-related difficulties before beginning to construct a prenup. Consider incorporating a provision indicating that any problems that cannot be handled between the two of you will be settled via divorce mediation or that you will seek marriage counselling before filing for divorce.
Some individuals even include a provision stating which divorce procedure they would employ if they divorce, such as collaborative law or divorce mediation vs. court litigation.
“In the United States, 40 percent to 50 percent of all marriages end in divorce, and part of planning for the future as a married couple involves contemplating all possibilities, including the ones you’d rather not contemplate.”
Include all the points explained above in the article while drafting your prenup.
What Can Make Your Agreement Null and Void
While prenuptial agreements are legally enforceable, they are not absolute obligations. When they are challenged in a couple’s divorce proceedings, a judge might dismiss them if specific circumstances are met.
If any of the following circumstances are satisfied, a prenuptial agreement can be ruled null and void:
- The Prenuptial Agreement Is Fraudulent: A prenuptial agreement compels both parties to declare all of their assets. If any party underestimated their assets or neglected to reveal all of their holdings, the agreement might be deemed null and invalid.
- The Contract Was Signed Under Duress: A prenuptial agreement might be ruled null and unenforceable if it can be proven that the agreement was entered into by way of fraud i.e. the party was made to sign it against their free consent or against their best interests.
- Weak Mental Capacity: If any party was pressured into signing the contract under the influence of drugs, which has affected their power to make a judgement, the prenuptial agreement may be ruled voidable in respect of the affected party.
- Inadequate Legal Representation: A contract can be disputed and declared null and unenforceable if any party signs it without the assistance of legal counsel.
- The Paperwork Was Inadequately Created or Submitted: As with any legal contract, the contents of the agreement may be called into doubt if the paperwork was not properly prepared or filed. Similarly, if the document was not properly submitted, it might be ruled invalid.
This should highlight the importance of properly drafting your prenuptial agreement and seeking professional legal assistance before finalising any marital arrangements.
Why Make a Prenuptial Agreement Request
To be honest, talking about prenuptial agreements isn’t exactly romantic, but it also doesn’t have to be a fight. You should be able to communicate your future with one another in a calm and honest manner as adults.
- Reaffirm Your Commitment and Love: It has nothing to do with your love for your fiance or your long-term commitment to the marriage if you have a prenuptial agreement. It’s only a matter of resolving your financial concerns so that your futures are safe for both of you.
- Protecting Both of Your Interests: If you don’t have a prenuptial agreement, you’ll be subject to your state’s marriage and property laws, and there’s no assurance that if you divorce, a court will be fair and unbiased to both of you. A prenuptial agreement safeguards both of you.
- Protecting Your Kids: If you have children from your previous marriage, it is normal to desire to protect their interests and needs. In the same way, as your new family grows, you’ll want to protect their interests.
- Professional Obligations: In several professions, a prenuptial agreement is normal operating practice. Your colleagues may need you to hold a valid license if you are a partner in a law firm or medical practice.
A prenuptial agreement is a good estate planning strategy that may be used to safeguard the financial requisites and responsibilities of you, your partner, and your children.
If you do not create preparations for the future, you will be remiss.
- One of the conditions for a prenuptial agreement is the creation of a list of assets and debts acquired before the marriage took place. You should also be mindful of any potential financial problems you may be having and inform your spouse about them.
- Any assets acquired prior to your marriage to your fiance are referred to as “premarital” assets. Both parties must complete a list of existing income, debts, assets, and any health-related difficulties before beginning to construct a prenup.
- If you have kids from your previous marriage, it is normal to desire to protect their interests and needs. In the same way, as your new family grows, you’ll want to protect their interests.
- If you don’t have a prenuptial agreement, you’ll be subject to your state’s marriage and property laws, and there’s no assurance that if you divorce, a court will be fair and unbiased to both of you. A prenuptial agreement safeguards both of you.
Now that you are well-aware of all the terms required to prepare a prenup, you can start making your checklist before prenuptial before it’s too late.
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