Premarital and Post-Nuptial Agreements as Estate Planning Tools

Premarital and Post-Nuptial Agreements as Estate Planning Tools

In Nevada premarital agreements and post-nuptial agreements are effective tools which can be utilized for estate planning needs. Premarital agreements are governed by NRS 123A. A premarital agreement is defined as an agreement between prospective spouses made in contemplation of marriage and to be effective upon marriage. This essentially means an agreement between you and your significant other made prior to marriage that sets forth specific obligations between the two of you. Post-nuptial agreements on the other hand are entered into by couples after marriage and not in contemplation of immediate divorce. Post-Nuptial agreements are not statutorily defined but have been acknowledged in case law.

In order for a premarital agreement to be enforceable the premarital agreement must be in writing and signed by both parties, the agreement must have been executed voluntarily, the agreement must not be unconscionable, and there must have been a full disclosure of all financial obligations and property of the parties or waiver of said disclosure. In order for a post-nuptial agreement to be enforceable it must be in writing and notarized by the parties, entered into voluntarily by the parties after marriage with the intent to stay married and living together and be recorded in any county in which real property owned by either party is located.

Premarital agreements may cover a variety of aspects between yourself and your fiancé. The most common reason someone would utilize a premarital agreement is to set forth the assets each party has going into the marriage and set forth the division of property to occur should the marriage end in divorce. Other issues which may be addressed in a premarital agreement include: the right to buy, sell, control or otherwise dispose of property; to set or eliminate the possibility of alimony; establish ownership rights or disposition of death benefits; and set forth other rights and obligations of the parties not in contravention of public policy or criminal statutes. It is important to note that one item which cannot be determined or set by a premarital agreement is child support. Child support must be set in accordance with the child support statutes in effect at the time of divorce.

As a general rule of thumb, when a couple becomes married, all assets acquired after the date of marriage are considered community property. Additionally, assets the parties owned prior to the marriage can easily become community property if the other party’s name is added to the account or title. Community property generally passes to the surviving spouse upon the death of the first spouse, as opposed to separate property which can be passed to beneficiaries through a will or other estate planning tool. Premarital agreements can be put in place prior to a marriage to limit or eliminate community property. Premarital agreement’s allow couples to elect to retain all of their property as separate property, keep all previously owned property as separate property and only allow newly acquired property to become community property or any combination thereof. A premarital agreement is ideal for couples who marry later in life and want to ensure their children receive their estates upon death rather than their new spouse.
Similarly, post-nuptial agreements can also dictate whether or not certain assets are to be considered community property or separate property. It is important to note that spousal support cannot be set by a post-nuptial agreement as defined above. The biggest difference between a premarital agreement and a post-nuptial agreement is that in a post-nuptial agreements the parties are entering into a contract with each other after marriage which changes community property to separate property instead of preserving the nature of separate property as dictated by Nevada law. As stated previously, changing the nature of property from community property to separate property is a way to ensure your estate planning desires are met.
If a premarital agreement or a post-nuptial agreement sound like something may benefit from, please contact Allison MacKenzie, Ltd. to set up a consultation.