Getting Married? Consider a Prenuptial Agreement

Once stigmatized (perhaps unfairly) as a bad omen to a marriage, prenuptial agreements (ante-nuptial or premarital agreement) are increasingly popular methods of family and estate planning.  They are a useful tool that can serve several important purposes.  Minnesota law provides for certain rights and property dispositions to spouses upon the termination of a marriage due to Divorce or Death.  However, Minnesota law allows parties contemplating marriage to enter into contracts which re-define these rights and property dispositions.

Common Reasons for  Prenuptial Agreement.  There are many reasons to enter into a premarital agreement - some of the most common include:

  • Significantly Different Financial Circumstances of the Parties.  One spouse may have a net worth that is significantly greater than the other spouse.  A prenuptial agreement can limit the property division or alimony payments due upon divorce - and can also limit the inheritance upon death.  A prenuptial agreement can also ensure that the spouse who is weaker financially is protected.  In addition, one spouse may have significantly more debt than the other spouse, so a prenuptial agreement can limit the other spouse's responsibility for those debts.  
  • Second Marriages and Blended Families.  Prenuptial agreements can protect your assets for your children from previous relationships.  People generally have different financial concerns when marrying later in life or for the second/third time.
  • Business Ownership.  Prenuptial agreements can protect your interests in your business from being affected by divorce or the death of your new spouse.    
  • Protection of Certain Assets.  Your plan for your property may be different than your new spouse's statutory rights during divorce or your death.  You may wish to protect certain family assets - such as a family cabin or land - from being affected by the new marriage.

Requirements for a Prenuptial Agreement.  Because prenuptial agreements basically allow you to enter into contracts to change the law regarding your property, it is very important to follow the requirements.  A court will scrutinize the agreement carefully if it comes under challenge.  Under Minn. Stat. 519.11, a prenuptial agreement must meet the following requirements.

  • Agreement must be in writing and between parties of legal age.
  • Agreement must be executed prior to the date of the marriage.
  • The parties must fully and fairly disclose their assets, earnings, and debts.
  • Each party must have the opportunity to consult with an attorney of their choice.
  • Agreement must be witnessed by two people and notarized.

In addition, the agreement must be substantively fair at the execution of the agreement and at the enforcement of the agreement.  The Minnesota courts have held that the basic test for enforcing the agreement is whether the circumstances on which the agreement were originally based have so drastically changed that enforcement of the agreement would not comport with the reasonable expectation of the parties at the inception of the agreement, thus making it unconscionable. 

Speak to a Minnesota estate planning attorney if you have questions or think a Prenuptial Agreement would be useful in your situation.