Prenuptial agreements, also referred to as antenuptial or premarital agreements, are beneficial in many situations, particularly those in which one or both parties are bringing substantial assets to the marriage or when they want to protect their children’s future property interests. Prenuptial agreements are often used in second (or third or fourth) marriage situations when there are children from prior relationships. One or both spouses may have assets that in the event of death or divorce, they prefer to leave to their children instead of all or a portion going to their spouse.
Indiana has adopted the Uniform Premarital Agreement Act. In Indiana, a prenuptial agreement is legally defined as an agreement between prospective spouses that (1) is executed in contemplation of marriage; and (2) becomes effective upon marriage. The typical prenuptial agreement contains provisions identifying each spouse’s property, defining the rights of each spouse to the other’s property during the marriage, and defining the rights of each spouse to the other’s property when the marriage ends by death or divorce. “Property” can include a present or future interest, legal or equitable, vested or contingent, in real and personal property, including income and earnings, according to Indiana Code Section 31-11-3-3.
While most prenuptial agreements cover “who gets what property” in the event of death or divorce, they can also address spousal maintenance payments. However, a premarital agreement that modifies or eliminates spousal maintenance may be held unenforceable if it causes one spouse extreme hardship under circumstances that were not reasonably foreseeable at the time the prenuptial agreement was signed. In that event, a court may require the other spouse to pay spousal maintenance to avoid such hardship.
Prenuptial agreements can also contain provisions for care and support of prior-born children (children born from prior relationships; not children born during this marriage). The court will have jurisdiction over any child-related issues concerning children born during the marriage, so any child custody and child support provisions put into a prenuptial agreement may not be upheld by the court. The court will determine what is best for the children at the time of divorce and that decision will likely trump any contrary provisions in a prenuptial agreement.
If you are considering a prenuptial agreement or your future spouse suggests one, you need to consult with an attorney to understand the ramifications and what should be included to protect your interests.