Building a Strong Foundation for Your Marriage with a Prenup
Prenuptial agreements once had a negative stigma. They were used mostly to protect the spouse with the most money or assets. Today, prenups are becoming more popular than ever, especially among younger couples.
According to a study by the American Academy of Matrimonial Lawyers (AAML), more than 60% of divorce lawyers have reported an increase in clients requesting prenups to not only safeguard their assets but protect assets they may acquire later.
A prenuptial agreement isn’t just for protecting vast wealth or significant assets. It can be a tool to help couples have an honest and open financial conversation, safeguard future assets, and protect both spouses from potential disagreements in the case of divorce.
While no one wants to consider that their happy relationship will end, Louisiana has one of the highest divorce rates in the U.S. A prenup is an option to plan for the unexpected. At The Johnson Firm, we help clients protect themselves and create a safeguard against possible conflicts with carefully crafted prenuptial agreements.
Benefits of a Prenuptial Agreement in Louisiana
Gone are the days when the mention of a prenup could derail a relationship or cause hurt feelings. A good prenuptial agreement is designed to protect both spouses in case of divorce and open up an honest, in-depth financial conversation before marriage.
There are many benefits to working with a Lake Charles prenup lawyer and creating a tailored prenup:
- Open up a dialogue about finances. While talking about a prenuptial agreement can be uncomfortable at first, an honest discussion about finances, property, and expectations can improve trust and communication in the marriage.
- Save money and time in case of divorce. A prenuptial agreement that’s properly drafted can address the most common areas of dispute in a divorce to avoid a lengthy court battle.
- Bypass Louisiana’s community property rules. In a divorce, assets and debts are split as equally as possible. This doesn’t work for every couple. With a prenup, both spouses can avoid a long battle in court by deciding how assets will be divided. After all, no one wants a judge and court to determine how their property will be split.
- Protect family heirlooms and separate property. Most people enter into marriage with their own separate property as well as heirlooms or family assets that would be devastating to lose in a divorce. Louisiana community property law states that assets acquired prior to the marriage are separate property. However, they can still be lost in a divorce if they are mixed with community property or used to benefit both spouses. A prenup is useful for identifying each spouse’s separate property and family heirlooms they should receive in a divorce.
- Protect children from previous relationships. A prenup can be used to designate specific assets for children from a prior relationship to protect children’s property rights. In a divorce, asset division by the state won’t consider children from previous relationships.
- Protect a business. If one or both spouses has a company, a prenup is vital to protect the business from liquidation. A prenuptial agreement can make the business immune to state distribution laws in case of divorce.
While not every couple needs a prenuptial agreement, prenups are advisable in many circumstances regardless of wealth. At The Johnson Firm, we recommend considering a prenuptial agreement if:
- There are kids from a prior relationship.
- One spouse will support the other during their education.
- One spouse has significantly more debt.
- One or both spouses has a business.
- One spouse has significantly more worth or income potential.
- The spouses are marrying later in life with substantial real estate, savings, or retirement assets.
Are Prenuptial Agreements Enforceable in Louisiana?
Like many other states, Louisiana has adopted the the Uniform Prenuptial Agreement Act (UPAA) for determining if a prenup is enforceable. A court will look at a series of rules to make sure the agreement is enforceable or determine if a spouse violated it.
Prenuptial agreements in Louisiana aren’t enforceable when one spouse shows:
- The agreement was unconscionable or unfair when it was signed because the spouse didn’t receive a reasonable, fair disclosure of the other spouse’s finances, didn’t waive this right in writing, and didn’t have reason to know about the other spouse’s finances, OR
- The agreement was not signed voluntarily due to coercion, duress, or fraud.
The court can void all or part of a prenup if they contain the following provisions:
- Unfair terms for one spouse that are one-sided, deceitful, or unjust
- Custody, support, or visitation of children
- Non-financial agreements such as stipulations for chores or personal appearance
- Illegal or unethical terms
A prenup is enforceable when it only deals with financial matters, not personal. Still, it can’t be used to address child support, and it can’t be used to limit a spouse’s right to alimony or spousal support during the divorce. Alimony is used by a judge in some cases to correct one spouse’s unfair financial disadvantage, such as a stay-at-home parent who will not have an income or work history. These clauses can be thrown out if a prenup tries to address child support or waive a spouse’s right to support.
What Should a Prenup Include?
A prenup is used to create separate property from community property or otherwise handle financial issues such as:
- Investments
- Division of assets and debt
- Spousal support
- Estate planning
- Business interests
A prenup can accomplish many things. To craft a prenuptial agreement that protects both spouses, a prenup lawyer in Lake Charles may guide you through topics such as:
- Providing for children from a prior relationship
- Whether both spouses will be responsible for the debts of the other
- What property is considered separate and what will be shared
- How property will be distributed if the spouses divorce
- Whether certain heirlooms or items will stay in the family
- How estate plans and retirement accounts or pensions will be treated
What is a Postnuptial Agreement?
A postnup, unlike a prenup, is signed after the marriage. A postnuptial agreement is designed to accomplish the same things as a prenup, but special rules apply in Louisiana.
Most postnuptial agreements are created after a major change in the marriage, such as the adoption or birth of a child, a major career change, or an inheritance. Under Louisiana law, postnups require judicial authorization. This means the court must give pre-approval before the agreement takes effect.
Can a Prenuptial Agreement Be Broken?
A legally binding prenuptial agreement can be very tricky or even impossible to break in Louisiana. If you want to break a prenup, you must generally prove one of the following:
- The prenup wasn’t executed properly
- There are unfair, false, or incomplete provisions in the agreement
- There were extreme circumstances when you signed that affected your judgment such as being pressured to sign
Note that formalities are essential in ensuring a prenuptial agreement will be upheld. In a recent case, the Louisiana Supreme Court voided a prenup due to a signature defect. The special rules that apply to prenups make it crucial to work with an experienced prenuptial agreement lawyer in Lake Charles, LA, especially if you are attempting to challenge or break an agreement.
Contact a Prenup Lawyer in Lake Charles, LA
An open, honest discussion about finances and how assets and debts will be divided in the case of divorce may be uncomfortable. Still, it’s always easier when the relationship is good. If the relationship sours and a divorce becomes contentious, even relatively minor issues can become lengthy court battles that could have been avoided with a carefully drafted prenup.
Considering a prenuptial agreement to protect the interests of both spouses? Contact The Johnson Firm today to schedule a consultation with an experienced Lake Charles prenuptial agreement attorney to get started.
