A prenuptial agreement, or prenup, is a contract regarding debts and assets that future spouses enter into prior to getting married. In Alabama, in order to be valid, a prenuptial agreement should be in writing and signed by both spouses. The parties should enter into a prenup after a full disclosure of debts and assets.
A prenup protects a spouse whose partner later demands assets or repayment of debts covered by the agreement. A prenup can cover separate property, property either spouse owned on their own prior to the marriage, and community property, property that the spouses came to own jointly during the marriage, like a house.
A prenup typically covers:
- Alimony, or spousal support. A prenup may cover how much alimony the lesser-earning spouse may be paid, how often, and whether they can get a lump sum instead of monthly payments. Spouses may choose to condition the amount and duration of alimony on the length of the marriage.
- Division of assets, including family businesses and real estate that the couple owns jointly.
- Division of debts, including which debts will be taken on by whom and how accounts will be split.
- A sunset clause, which deems the prenup null and void if the marriage lasts for a certain length of time.
Going into more detail, a prenup may cover:
- Retirement benefits, including pensions
- Separate businesses
- How couples will file federal, state, and local taxes
- Management of household expenses
- Arrangements regarding joint investments, such improvements to real estate or a joint business
- Management of joint bank accounts
- Contributions to savings accounts, including college savings accounts for children
- Credit card bills
- How property will be distributed to the surviving spouse if one spouse passes without a will or trust in place
- How arguments may be settled, such as with mediation or arbitration
- Agreements regarding assistance with education, like how one spouse will help another finish college
- Family property, such as a ring that is a family heirloom
A prenup may not cover:
- Child support. Child support is due to the child, not the parent. A parent cannot waive child support on behalf of the child.
- Child custody, including visitation. Determinations regarding child custody and visitation are based on what is in the best interests of the child. Factors to be taken into consideration include what the parents prefer, the parents’ abilities, and the child’s best interests at the time of the divorce, including the child’s preference. In Alabama, there is not a specific age at which the court considers the child’s opinion.
- Clauses that encourage divorce
- Information about personal matters, such as what name a spouse may use after a divorce
- Language on unlawful matters like illegal drug sales
A prenup cannot be formed under duress, meaning that it was signed under pressure or without enough time for parties to fully consider it. A prenup also cannot be unconscionable, meaning that it leaves one party with so few assets that they are financially unstable after a divorce. The court will deem such prenups invalid or strike portions of them.
When the spouses have opposing interests, each should hire their own attorney to review the prenup. The spouses should not hire a single attorney to draft the prenup. A single attorney may choose to draft the prenup, but find they have a conflict of interest in doing so. If this occurs, the spouses should let that attorney go. They should each hire a new attorney to negotiate the existing and new terms of the prenup. One spouse should not hire the Cullman divorce attorney the parties both shared earlier.
A party who thinks they might be placed in a compromising position, such as a pregnant wife-to-be or a groom set to inherit a family business, should talk to a Birmingham divorce attorney before signing a prenup. Such parties are more likely to be at risk for signing a prenup under duress. They may need the help of an attorney to see whether the terms of the prenup are fair to them.
Attorney Steven A. Harris regularly blogs in the areas of family law, bankruptcy, and real estate closings on this website. He is always available in any of the firm’s offices or by phone anytime for a consultation. Mr. Harris tries to provide informative information to the public in easily digestible formats. Hopefully you enjoyed this article and feel free to supply any feedback. We appreciate our readers and love to hear from you!