PRENUPTIAL ASSET PROTECTION FOR MARYLAND COUPLES
Prenuptial agreements were long viewed as tools for only the super wealthy. These pre-marital agreements were once even considered taboo. However, with nearly half of marriages ending in divorce, a prenuptial agreement is a wise precaution for Maryland residents, especially if they are bringing significant assets into their marriage.
WHY GET A PRENUPTIAL?
A prenuptial agreement serves to mitigate the potential risk of property disputes in the event a marriage ends in divorce. Of course, those who want a prenuptial agreement have one written to prevent their individual property from becoming joint property. In addition to protecting the individual’s assets, the prenuptial can serve many other purposes. For instance, the prenuptial can be used in arranging a spouse’s estate plan, or even establish procedures for deciding future financial matters.
The laws regarding prenuptial agreements vary from state to state. Therefore, the effect of the prenuptial will largely depend on the respective state’s marital property laws. Because Maryland is an equitable distribution state, all property acquired by either spouse, or both, during the marriage, is marital property. When granting a divorce and dealing with individually owned marital assets, the judge does not necessarily have to award the non-owner spouse one half of the value of the marital property. However, the judge certainly may or may not award more than half the value of these assets. Therefore, prenuptials are especially important in Maryland because, so long as they are found to be fair, the court will enforce them and their content will govern the distribution of those assets addressed in the prenup.
BREAKING A PRENUPTIAL
Typically, in the event a prenuptial agreement is present, the asset distribution upon divorce will follow the terms set forth in the agreement. However, although rare, there are ways that prenuptials can be broken. Aside from the property laws of the respective state, what matters most regarding whether a prenuptial agreement is upheld is how well the agreement is drafted.
One event in which a prenuptial agreement may not be followed is if one spouse was dishonest about his or her assets when the prenuptial was made. Of course, the judge may exercise a great deal of discretion in these instances, as the weight of such dishonesty will depend on the discrepancy in the assets claimed versus those actually possessed.
Another event causing a prenuptial to be viewed as invalid is when a spouse was coerced into signing the agreement. However, in order for this to be a valid reason, there must be actual coercion.
Lastly, the third most common way for a prenuptial to be found invalid is when it contains an unenforceable condition. However, a prenuptial is a private agreement between two individuals, and therefore a single condition must be very extreme in order for the court to find that the prenuptial is unenforceable.
THE BENEFITS OF A CAREFULLY DRAFTED PRENUPTIAL AGREEMENT
The best way to ensure that a prenuptial agreement is enforceable is to have it drafted by an experienced family law attorney. In doing so, each individual’s provisions and goals are most likely to withstand any future legal challenges.