A prenuptial agreement (also known as a “prenup”) is a contractual agreement entered into prior to marriage. This agreement allows the parties to determine the classification of property and the disposition of assets and debts in the event of divorce or the death of a spouse. Couples may also choose to enter into a postnuptial agreement, which allows parties to address the same topics as a prenuptial agreement, but it is entered into after the parties marry.
In Tennessee, prenuptial agreements (often called “prenups”) are legal contracts made by couples before marriage that outline the division of assets and financial responsibilities in the event of divorce or separation.
Legality: Prenuptial agreements are recognized and enforceable in Tennessee, provided they meet certain legal requirements.
Written Agreement: The prenup must be in writing and signed by both parties. Oral agreements are not enforceable.
Full Disclosure: Both parties must provide a full and fair disclosure of their financial situations, including assets, debts, and income. Lack of transparency can lead to the agreement being challenged in court.
Voluntary Consent: Both parties must enter into the agreement voluntarily, without coercion or undue pressure. This means that each party should have the opportunity to review the agreement and seek independent legal advice.
Fair and Reasonable Terms: While the terms of the agreement can be tailored to the couple’s needs, they must not be unconscionable or heavily biased against one party, as this could render the agreement unenforceable.
Modification and Revocation: Prenuptial agreements can be modified or revoked after marriage if both parties agree to the changes in writing.
Enforceability in Court: If a divorce occurs, the court will generally enforce the prenuptial agreement unless it was deemed unfair at the time of enforcement or if there was a failure to disclose assets.
Considerations for Same-Sex Couples: Same-sex couples can utilize prenuptial agreements just like heterosexual couples, ensuring that their unique financial situations and rights are protected.
In Tennessee, several groups of people may benefit from having a prenuptial agreement:
Individuals with Significant Assets: If one or both partners have substantial assets, a prenup can help protect those assets in the event of a divorce.
Business Owners: Entrepreneurs or business owners can use a prenup to safeguard their business interests and ensure that the business remains intact in case of separation.
Previous Marriages: Individuals who have been married before may want a prenup to protect assets acquired prior to the current marriage and address any obligations to previous spouses or children.
Disparities in Income: Couples with significant differences in income or earning potential may want a prenup to establish financial expectations and protect each party’s interests.
Debt Protection: If one partner has significant debt, a prenup can help protect the other partner from being liable for that debt in the event of divorce.
Estate Planning: Couples who want to clarify how assets will be handled in the event of death or divorce may benefit from a prenup, which can complement estate planning.
Family Expectations: Some families may have specific expectations regarding inheritance or asset division, and a prenup can help address these concerns.
Same-Sex Couples: Same-sex couples, like any couples, can use prenups to clarify financial responsibilities and protect individual interests.
Ultimately, anyone entering into a marriage with significant financial considerations or unique circumstances may want to consider a prenuptial agreement. It’s advisable to consult with a legal professional to ensure that the prenup is fair, legally sound, and tailored to the couple’s needs.
Prenuptial agreements are customizable and can be as detailed as parties desire. A prenup will include language defining marital property and separate property. It will also include language determining how marital and separate property will be treated during the marriage, how marital and separate property will be treated at the time of death, and the disposition of marital and separate property at the time of divorce. For example, if parties purchase a house during the marriage, the prenup can determine if both spouse’s names are required to be on the deed, if the property has to be sold in the event of divorce, and the amount of equity each party has in the property.
A prenup can address concerns about finances during the marriage and whether a party will be entitled to alimony in the event of divorce. For example, parties can determine how routine living expenses or large expenditures will be paid during the marriage. Parties can also specify certain requirements for a spouse to be entitled to alimony and how alimony will be calculated in the event of divorce. A prenuptial agreement cannot address the issues of child support and child custody.
The last thing that most divorcing couples want to do is endure what can be a drawn-out process of dividing marital debts and assets. By having a prenuptial agreement, divorcing couples can avoid the additional emotional burden and costs of a lengthy settlement process or litigation. In the absence of a prenuptial agreement, a couple’s assets will be distributed per the default laws of their state. However, a prenuptial agreement can allow a couple to provide for an arrangement that works best with their relationship. Prenuptial agreements can be especially beneficial to couples with a significant wealth disparity between the parties, couples that either jointly or separately own a business, couples with family trusts or inheritance, and couples who have children from a previous relationship.
Tennessee law mandates certain requirements to be met for a prenuptial agreement to be enforceable. Prenuptial agreements must be entered into freely, knowledgeably, in good faith, and without duress or undue influence. Our attorneys stay up to date on case law and legal developments so that they withstand challenges of invalidity or unenforceability.
Our knowledgeable team at Digby Family Law, PLC welcomes the opportunity to assist you.
Contact us today via our online form or by phone at 615-997-3741 to schedule a consultation.