Marriage Contracts (Nuptial Agreements)

 

There are two versions of marriage contracts in Minnesota. The first is a prenuptial agreement, which is an agreement that is executed before a couple marries and the second is a postnuptial agreement which is executed after a couple is married. These marriage agreements control the property rights and income rights of each spouse. 

PRENUPTIAL AGREEMENTS

Marriage is the legally or formally recognized union of two people as partners in a personal relationship.

Prenuptial agreements ‘prenups’ also referred to as antenuptial agreements, is an agreement between prospective spouses entered into prior to marriage. It is the agreement which is used to address the division of couples’ assets in the event of separation, divorce or death, it is therefore the antidote for gender discrimination. The contract's contents can vary depending on the couple's preferences and circumstances. 

 

Prenuptial agreements date back to ancient Egypt! 

 

Historically these written or verbal contracts established the property that each spouse would bring to the marriage whereby prenuptial agreements set the bride’s dowry and the bride wealth–which was regarded as the price that a groom would pay the bride’s family in exchange for marrying her. 

The bride and groom’s parents were the ones responsible for these agreements. This practice was commonplace until the early 20th century. 

For several thousand years, women were not granted the right to own property and choose their spouses. Prenuptial agreements became a way to ensure that a woman could access her husband’s property if he died.

Historically, marital contracts or prenuptial agreements originated from Egypt where the Hebrews provided for an ancient Hebrew marriage contract called Ketubah.

Several countries have adopted prenuptial contracts. In the United States, the New York State passed the Married Women’s Property Act in 1848, ensuring that married women would inherit their husband’s estate.

In France, the customary prenuptial derives from the dowry, first recorded in the ninth century.

PRENUPTIAL AGREEMENT IN MINNESOTA

In Minnesota prenups are governed by the state’s statutes and case laws. It is the position of the law that the agreement must be in writing and signed by both future spouses; the very agreement must be signed in the presence of the witnesses and the notary. 

It is the position in Minnesota that several requirements should be met before the agreement is to be enforceable, this includes full and fair disclosure of the spouse’s assets which is designed to prevent one partner from hiding marital assets, it is therefore that well drafted prenups should include a list of each partner’s assets as well as income, preferably recent income tax filings. It is also required that each party should have the opportunity to consult with legal counsel of their choice, this is meant to prevent one party from surprising another party on their wedding day. It was the holding of the court in the case of MN vs AN that the contract is entered freely by both parties and the circumstances cannot be regarded as unfair.

Although it is executed prior to marriage it does not become effective until after the wedding, like any financial union, it is important to define the spouses’ rights in that relationship and to protect their financial interests which is the role that a prenuptial agreement plays.  

 

PURPOSES OF MARRIAGE AGREEMENTS

Protection of Assets

When entering into marriage, couples often consider creating a prenuptial agreement to safeguard their individual assets. According to Minnesota Statutes, a prenuptial agreement allows spouses to define their property rights and financial responsibilities in the event of a divorce. This proactive step can help avoid disputes over asset division, providing transparency and protection for both parties.

Ensuring Financial Security

Prenuptial agreements are valuable tools for establishing financial security within a marriage. Under Minnesota law, couples can address matters such as alimony and spousal support in prenuptial agreements, this allows them to agree on terms that align with their preferences and circumstances, providing a clear framework for potential financial obligations.

Preserving Family Businesses

For couples with family businesses, a prenuptial agreement can be crucial. Minnesota law recognizes the importance of protecting family assets, including businesses, and allows couples to address these matters in their prenuptial agreement (Minnesota Statutes Section 519.11). This ensures the continuity and integrity of family enterprises, even in the event of marital dissolution.

When it comes to marriage, love is patently a core thing, but practicality should not be ignored. Prenuptial agreements may not be the most romantic aspect of planning a wedding, but they serve a vital role in protecting the interests of both parties. 

 

THE BENEFITS OF CREATING A PRENUPTIAL AGREEMENT.

Protection of Separate Property

Couples often enter into marriage with pre-existing assets, such as property, investments, or family inheritances. A prenuptial agreement protects these assets by specifying which property remains separate and which becomes marital property. This ensures that in the event of divorce, the pre-marital assets are safeguarded, preventing potential disputes over their distribution.

Peace of Mind

Perhaps the most valuable benefit of a prenuptial agreement is the peace of mind it offers. Knowing that both spouses have clearly defined expectations and protection in place leads to a more secure and less stressful marriage where it allows couples to focus on building a life together without the constant worry of “what if.”

Protection From Debt

Marriage often means sharing financial responsibilities, but it can also mean sharing debt. A prenuptial agreement delineates which debts are considered joint and which are individual. This protects one spouse from shouldering the other's pre-existing debt, providing peace of mind and financial security.

Financial Transparency 

One of the most significant advantages of a prenuptial agreement is the financial clarity it provides. Marriage can intertwine assets, debts, and financial responsibilities. A prenup allows couples to openly discuss their financial situations and clarify their expectations. By addressing these issues upfront, couples can reduce misunderstandings and disputes later on.

Prenuptial agreements outline how assets, income, and debts will be divided in the event of divorce or separation. This clarity provides peace of mind and enables couples to focus on the emotional aspects of their relationship without the cloud of financial concerns.

POSTNUPTIAL AGREEMENT IN MINNESOTA

The discussion brings in a postnuptial agreement also known as marital agreement of the spouses after marrying; this contract outlines the ownership of financial assets in the event of a divorce. The contract also sets out the responsibilities of each for the duration of the marriage.  

Critics argue that the agreement indicates the couple expects the marriage to fail. However, if a contract can remedy financial discomfort, a couple might consider a contract in hopes of restoring marital harmony or for peace of mind.

Generally, all marriage contracts are paramount important legal documents that protect each spouse’s assets in marriage and provide peace of mind for the future. By defining marital and separate property, protecting spouse’s business and retirement savings, and preserving inheritances for children, a prenup helps to ensure that couple’s assets remain secure.

 

(C) 2024 Kotten Law Firm LLC

Authors Nitoya Joram and Glen Kotten