Premarital agreements that are properly constructed will require maintenance over time.
Here are examples of these critical factors.
In researching the next book, there is no shortage of popular videos and comments decrying that premarital agreements don’t work. There’s typically a lot of comment screaming, sometimes in all caps, by a person who lost big in their own divorce. The fact is that prenups do work when done appropriately, but the problems typically happen when someone downloads a deficient DIY document, there are no attorneys involved in the process, and/or they don’t follow the terms of the agreement in keeping their assets separate. A few months back, I did another blog about the seven reasons why prenups fail: https://www.plainenglishattorney.com/blog/why-prenups-blow-up-seven-ways-premarital-agreements-fail
That blog covered where things were deficient, but even if all of those mistakes are avoided, this simple checklist of three simple items can and should be addressed even if the premarital agreement was set up correctly in the first place. These simple but critical steps help make sure a premarital agreement is maintained. Situations and assets may change over time, so it’s important to periodically reflect on those changes and circumstances.
- “Refresh” the Premarital Agreement every few years. Having an otherwise valid prenup thrown out because it was “stale” amounts to laziness and lack of persistence. At a maximum, a premarital agreement should be reviewed, reworked, and the revised contract executed every five years. It’s also not crazy to handle this process every three years. The asset lists of separate and joint property should be updated, but this is also an opportunity to reaffirm the core elements of the prenup.
- Ensure the Updated Prenup is Reviewed by Both Attorneys. It’s not enough for you to just go through an updated agreement, print it out, and ask your spouse to sign it. They can always claim that they never read it, or they can claim that they didn’t understand the terms since it had been 3-5 years since they last looked at it. By making sure your spouse’s attorney reviewed the agreement and met with your spouse to discuss it, there is no way for them to feign ignorance about what was in the document as a way to get a judge to throw it out.
- Be Ready to Walk Away. If it was a struggle to get your spouse to sign the premarital agreement in the first place, then it might be even more difficult getting them to sign an updated version every few years. However, you should never simply accept the fact that your spouse won’t sign it again and just continue in the marriage. You should always be ready to walk away from the marriage, especially if they are refusing to update and sign a revised agreement. Basically, if you are already married with a prenup and they are refusing to renew it, there is a very good chance they would rather have your money than you. This is the time to walk away because the longer you wait to leave, the greater risk of the premarital agreement will be set aside in the divorce.
Having a premarital agreement is just one of the components of a dynamic divorce protection system, but it is a critical component. However, the agreement has to be done correctly by a professional who knows what they are doing, under the right circumstances to hold up in court, and it needs to be revised and renewed every few years. Without this agreement being as rock solid as possible, the other components may fall by the wayside as well.
Look for the upcoming (as of yet unnamed) book on this merging of family law and asset protection coming out in July or August of 2023.