It takes careful planning and open discussion to build a lasting relationship.About 40% of marriages in the U.S. end in divorce, and many couples are choosing to plan ahead and enter agreements that govern what will happen if they divorce.If you want to draw up your own marriage contract, you need to have frank discussions with your partner, do some research, and write your agreement carefully.
Step 1: Consider the benefits of marriage contracts.
Prenuptial agreements, prenups, and "premarital agreements" are commonly referred to as marriage contracts.A well-drafted marriage contract can protect the parties' property and make a divorce less painful, but contemplating divorce and talking about finances can be very challenging for a couple.Defining what property is separate property and what is community property can be done with a marriage contract.
Step 2: There are drawbacks to marriage contracts.
There are reasons not to enter a marriage contract.Negotiating a marriage contract is not romantic.Bad feelings can be caused by discussing divorce and asset division.It's hard to imagine that the person you want to marry could try to take advantage of you during a divorce, and it can be even harder to face the implication that you might do the same to them.Marriage contracts may not be a good fit for your relationship if it can't handle these challenges.Without a marriage contract, state law may protect you.Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin all have opt-in community property laws.Most property acquired during marriage is presumed to be community property, while property obtained before or after marriage or with funds earned before marriage are considered separate property.If you live in a community property state, you can just rely on the law for the division of your property in the event of a divorce.
Step 3: Discuss a marriage contract with your partner.
Start talking about a contract six months before the wedding.You don't have to sign an agreement with which you're not completely comfortable.You could give your partner a book or website to read on his or her own time.You will be more prepared to have an honest conversation if you have a better understanding of the basics.
Step 4: Don't hesitate to consult attorneys.
If a court determines that one spouse waives his or her rights without fully understanding the contract, your contract may be invalid.You and your partner should not have a conflict of interest.Each attorney should review the contract terms and explain what rights they have.Some of the terms may not be in your best interests, so remember that the contract is a compromise.Your attorney will ask you to consider the contract carefully.Several high profile cases of marriage contracts being overturned have shown that it can be cheaper and simpler to not have a marriage contract at all.Any state law that relates to your agreement can be advised by an attorney.It's possible to get referrals from friends and family, or from attorneys who don't practice family law but know a colleague who does.Referred services can be found through your state and local bar associations.
Step 5: Consider hiring an accountant.
An accountant can help you take stock of and evaluate your assets, as well as estimate to what extent those assets will appreciate or depreciate in the future.This can be useful for planning for your family's future needs, as well as anticipating each spouse needs for the division of assets in the event of a divorce.
Step 6: Consider pre-marriage counseling.
Relationship counseling can help couples improve their communication skills.Communication, listening, and responding to another's concerns are skills that need to be practiced and developed.
Step 7: List your debts and assets.
Detailed lists of your property should be created by you and your partner.This includes bank accounts, vehicles, real estate, business ownership, investment accounts and credit cards.As you determine what will be shared and what won't, you will refer to these lists.Before executing the contract, it is important to completely and honestly disclose your assets and debts.The contract may not be valid.
Step 8: Look at sample contracts.
Look at sample contracts with your partner before you start drafting a marriage contract.If you don't know the terminology, you should identify the clauses you think would be useful.There are sample marriage contracts online.The sample was designed to give the spouses community property rights.All earnings and property are separate in this sample.You can change any sample to fit your situation.
Step 9: Come up with a plan that works for you.
Flexibility in marriage contracts is allowed by the law.You can work out any financial arrangement that is legal.If you keep assets and earnings separate for the wealthier spouse, he or she won't lose half of his or her wealth in a divorce.In the event of a divorce, you may want to designate certain assets to the less wealthy spouse so that he or she gets a fair share.Some provisions that courts won't enforce include: Agreements regarding child support, custody, and visitation; Financial incentives that promote divorce; and waivers of spousal support/alimony, especially if one spouse would have to collect welfare.
Step 10: The contract will be signed if you describe the parties.
The parties to the contract are you and your partner.When describing a party, include his or her name and the title by which he or she will be referred to throughout the contract.John and Jane entered the contract on May 12, 2009.
Step 11: You should specify that you want to decide your own property rights.
You are making your own property division decisions, not the default property laws of your state.In the event of a dissolution of their marriage, each Party wants to define and determine their respective rights and obligations with respect to his or her own property and in the property the other, regardless of whether their property rights are to be governed by the laws of the state.
Step 12: You have the right to advice from independent attorneys.
Both parties have had the chance to have the contract reviewed by a lawyer, so it's important that neither party was forced or rushed into signing.Each party has the opportunity to retain his or her own lawyer and receive independent legal advice regarding the terms of this Agreement.
Step 13: Both parties understand the contract.
A statement that the parties fully understand and agree to the terms is a common clause."The Parties each warrant and represent to the other that they each fully understand all the terms, covenants, conditions, provisions, and obligations incumbent upon them by virtue of this Agreement to be performed or contemplated by each of them hereunder."
Step 14: The contract is contingent on the marriage.
If you and your partner decide not to get married, the contract won't have any effect.In the agreement, note this fact.The Agreement is contingent upon the parties' contemplated marriage.If the marriage doesn't happen, then this Agreement will be void and of no force or effect.
Step 15: Tell us about your property.
This section can be used to designate your current and future property as separate property.Do the same for your spouse's property.Refer to this sample for ideas.There are some common types of property that couples choose to designate as separate property.
Step 16: Schedule your debts and your property.
Attach two lists of the property to your contract and refer to them when describing your separate property.All assets and liabilities have been accurately stated on Exhibits A and B attached hereto.
Step 17: Tell us about your community/marital property.
This section can be used to designate what property you want to treat as community/marital property.Both parties will own this property.Marital property includes all property acquired prior to the date of separation that is not within an exception that makes it separate property, such as a gift or inheritance.By written agreement, spouses can contribute separate property to the community.
Step 18: Define the event that ends.
The asset division provisions of the contract are triggered by the terminated event.When couples get divorced without a marriage agreement, they often disagree about when the marriage was officially over, raising questions of how to divide any property acquired between their competing dates of separation.To avoid confusion, specify your terminated event clearly."Termination event is defined to be the soonest occurrence of the following events: " The date on which a Party provides the other Party with written notice that he or she intends to dissolution the marriage."The notice shall be delivered by the United States Postal Service by registered or certified mail, return receipt requested, or overnight courier with proof of delivery thereon.
Step 19: What will happen after the event?
This section is used to specify what will happen to the community property if the event occurs.Each party will keep their own property.What will happen to the property?Who will take care of the family home?Should you split the proceeds of the home sale?When will the home be sold and who will live in it?Will there be support for one spouse?How much?State law may prohibit a spouse from waiving his or her right to support.Which assets will be split evenly?Which assets will be divided?Is it possible for one spouse to keep a major asset in exchange for letting the other spouse keep something else?Will assets be set aside for a child's college fund?If one spouse dies before a divorce decree, what happens?
Step 20: There is a "sunset clause".
If enough time passes, a sunset clause states that the contract will become null and void.In the event of a divorce, the property will be divided according to state law if the contract becomes null and void.It is possible to specify that the contact will remain in effect until you have children.If the marriage is going to last, this arrangement would protect each party's assets."This Agreement will become null and void and of no force or effect upon the earlier occurrence of either of the dates upon which: (1) the Parties remain married for ten years, or (2) the parties have a child together."
Step 21: Determine if both parties have disclosed their assets.
Both parties have made complete financial disclosures to each other.Failure to do so may invalidate the agreement.Each Party confirms that he or she has received sufficient financial disclosure of the other Party's assets from the others and that they have offered to respond fully and directly to all questions that the Party might have concerning.To the extent that any assets, income, or liabilities have not been disclosed for any reason to either of them, knowledge of such additional assets would not be relevant to the determination to enter into this Agreement and to be married.
Step 22: There is a choice of law clause.
What state's law will be used to interpret your contract is the standard clause.You can pick any state, but it's usually the state you live in.The laws of the State of New York will govern the interpretation of this Agreement and the status, ownership, and division of property between the Parties wherever either or both of them may reside.
Step 23: Both parties enter the contract willingly.
The clause should say that the parties were not pressured or forced to sign the contract.Each party acknowledges that the Agreement is fair and equitable and that it is being entered into voluntarily.Each Party has read this Agreement before it is executed, understands it, and is aware of their rights under the terms of the Agreement.
Step 24: There is a "necessary documents" clause.
The parties promise to sign any documents necessary to carry out the agreement according to this clause.This prevents a party from agreeing that an asset is community property and then not transferring ownership." Each Party shall, upon the request of the other or of any third party with an appropriate interest, execute, acknowledge, and deliver any instruments appropriate or necessary to carry into effect the provisions and intent of this Agreement."
Step 25: Consider the "entire agreement" clause.
An "entire agreement" clause states that this document is the complete agreement of the parties and supersedes any prior oral or written agreements.It's not possible for a party to claim later that there was an agreement on some term that wasn't included in the contract."This Agreement sets forth the entire understanding of the Parties and supersedes all other agreements, written or oral, between the parties."The Parties agree that no agreements have been entered into prior to the date of this Agreement.Neither Party has relied upon any representation of the other Party.
Step 26: Discuss amendment procedures.
You and your partner may want to change the contract in the future.How will that process work?"This Agreement may not be amended or revoked except by an instrument in writing signed by both of the Parties and acknowledged and witnessed with the same formalities of this Agreement."
Step 27: A "binding effect" clause should be added.
The rights of your heirs and others who may have an interest in your property will be governed by this clause."This Agreement will be binding upon and will ensure to the benefit of the parties, their respective heirs, executors, administrators, and assigns."
Step 28: A partial invalidity clause should be included.
The clause states that the contract will remain in effect even if it is not enforced.If the portion held to be invalid, unenforceable, or void is held by a court of law, the parties agree that it won't affect the rest of the Agreement.
Step 29: There should be a section about lawyers and legal fees.
Mention the attorney's name if the parties have been advised by independent counsel.If one spouse contests the contract during divorce, who will pay legal fees?John states in his declaration that he has been represented by independent counsel in the negotiation and execution of this Agreement, and he fully understands his legal rights and liabilities.John will be responsible for Jane's legal fees incurred in connection with the negotiation, preparation, and execution of this Agreement.The reasonable value of any legal services rendered on behalf of either Party by reason of the other Party's unsuccessfully contesting the validity of this Agreement or any provision hereof will be taken into account.
Step 30: A signature block is created.
The signature block should include a line for each party to sign, with the typed or printed name of the party below his or her signature.A place for a public to sign is also included.
Step 31: Don't hesitate to consult attorneys.
Courts prefer that both parties be aware of their rights before signing.Both parties should hire separate attorneys before signing the contract to make it less likely that it will be enforced.
Step 32: The contract should be signed by a public figure.
You can sign the contract with your partner at a notary public.The agreement will be signed and stamped by the notarial.To verify your identity, bring a valid form of identification, such as a driver's license or passport.You can find a notary public at the bank.If you are a bank customer, most banks don't charge a fee for notary services.If you don't have a bank account, you can use the bank's service for a small fee.
Step 33: Don't worry about the contract.
In order to not feel pressured to agree, be sure to negotiate and execute the agreement well in advance of your wedding.Don't sign until you're happy with the terms.After you sign the contract, focus on your relationship.Relax and move on, because you may never need to refer to it again.You can change your contract in the future, but it's best to think of it as an insurance policy.If you ever need it, you'll be happy to have it.