Premarital Agreements

Premarital Agreements & Other Marriage Concerns

The impact of romance in matrimonial matters too often clouds the realities of married life, typically to the detriment of either or both spouses. As in most of the comments in this website, the concern is that everyone is aware of the consequences of certain actions and commitments as well as the need for professional guidance beforehand. This is certainly true with marriage. Today, it is probable most of us will enter marriage at least two or even more times in our lifetime. This is a relatively new circumstance. Our grandparents were far less likely to terminate their first marriage. With this fundamental change, come challenges which often result in unusually harsh results for one or even both spouses when a second or subsequent marriage fails.

Fortunately, most of these issues are economic. Understandably, the most important consideration in marriage dissolutions, formerly referred to as “divorce”, is securing a meaningful, continuous relationship between the children with both parents and the fair and adequate support of those children. Our legislature, courts, lawyers, counselors and other professionals have done outstanding work in addressing these issues for the benefit of children involved in marriage dissolutions.

Often, however, laws in marriage dissolutions have surprising economic results often unfair to one or even both spouses. Some of these “surprises” are:

A) Premarital (“Antenuptial”) Agreements

Frequently, in the second or later marriage, one of the spouses to be will insist upon a premarital agreement, also known as an “Antenuptial Agreement.” It is a contract between parties about to marry and infrequently used but often enforced in Minnesota marriage dissolutions. Generally it modifies provisions of Minnesota’s marriage dissolution laws, to protect both spouses’ assets acquired both before and after their act of marriage. If, for example, one or both parties own part or all of a successful business and their marriage fails and is dissolved, the increase in value of the business during their marriage, is considered “marital” property which must be equitably divided between them. In many instances this may be viewed by one of the parties as unfair, particularly when the increase in value of that business during the marriage is found by a court, based upon disputed expert testimony, to be much higher than anticipated. That increase must be equitably divided between the parties, typically each being awarded one-half of the increase. This could cause significant difficulties for the spouse owning that business, particularly if third parties are co-owners. Quite frequently, that spouse will be in a financial bind in paying the other spouse’s share of the increase in value of the business and still maintaining a working relationship with co-owners. Avoiding such a predicament is often best achieved with a premarital agreement.

However, before entering into such an agreement, the spouse not seeking it should consult with a family lawyer to explain, in detail the negative impact of the agreement upon a party’s rights if the marriage fails and ends in dissolution. That attorney may likely suggest alternative provisions in the proposed agreement making it more fair and reasonable. Quite often the person requiring the premarital agreement agrees to pay the fees of the attorney advising the other party. Often there is “sticker shock” when the attorney’s bill arrives. “It’s just a simple agreement” is the usual complaint. That is not an accurate statement. This is a complicated agreement significantly modifying a party’s rights under many provisions of Minnesota’s marriage dissolution law. At least five hours and often more for an attorney to read, evaluate, confer with and negotiate modifications to the proposed agreement is quite reasonable and necessary to fully advise the client who is asked to sign it.

B) Spouse’s Previous Marriage Dissolution(s)

Very often, re-marriage or the initial marriage involves a spouse who was previously married. If so, the other spouse should consult with a lawyer who reviews all relevant Judgment and Decrees and subsequent Orders, if any, of all previous marriages of the spouse before the upcoming marriage. In Minnesota, as well as many other states, a prior spouse may be able to seek both an upward modification of spousal maintenance (formerly known as “alimony”) and that it be made permanent, if it had been granted for several years only when the marriage was dissolved. These rights are sometimes eliminated in Minnesota by what is frequently referred to as a “Karon waiver.” More likely, however, there is no such waiver in the previous marriage(s) of the spouse to be. If not, an often unexpected and damaging to the budget, motion by a previous spouse for an Order increasing spousal maintenance and making it permanent is sought and awarded. You should be aware of this before your forthcoming marriage by consulting with an experienced family law attorney. It may affect your plans to marry without eliminating through possible compromise and settlement, such prior spouse’s rights. The harshness of these unexpected difficulties causes many lawyers to paraphrase Yogi Berra, stating “Spousal Maintenance: It ain’t over till it’s over.” Heed those words.

 

Please note, the contents of this website are for information purposes only and do not constitute legal advice and no attorney – client relationship is intended nor exists by the information provided herein. An attorney – Client relationship with Lee Watson only exists following the execution of a written Legal Services Agreement with him, a form of which to review is available on request.

Copyright 2014, Lee Watson.

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