Although some believe that prenuptial agreements are only for the wealthy or celebrities, many couples can benefit from utilizing this effective financial planning tool. In fact, given Alaska’s unique laws regarding marital estates and spousal support, having a well thought out prenuptial agreement in place can enable a couple to avoid a dispute over finances if the marriage ends in divorce.
Peggy A. Roston has over 26 years of experience serving clients throughout the state of Alaska. She has drafted prenuptial agreements, reviewed prenuptial agreements prepared by other attorneys and litigated the enforceability of prenuptial agreements.
What is a prenuptial agreement?
As the name implies, a prenuptial agreement, or premarital agreement, is a contract entered into by a couple prior to marriage. In short, this agreement specifies each future spouse’s property ownership and clarifies the property rights of each spouse if they decide to divorce. At the same time, a prenuptial agreement can also specify how the parties intend to manage joint bank accounts, household bills, and credit card payments. Finally, a well designed prenuptial agreement can establish a framework for handling disputes in the event of a divorce, giving the parties the option to pursue alternatives to litigating the divorce in court.
Reasons to Have a Prenuptial Agreement
Let’s face it: a marriage is not only a commitment between two romantic partners, it is also a financial relationship. While discussing financial matters or the possibility of divorce is not easy, many couples can benefit from exploring any financial issues between them and understanding how those issues can impact their relationship. In light of the fact that financial difficulties are a leading cause of divorce, entering into a prenuptial agreement may also serve as a preventive measure.
There are a number of considerations a prenuptial agreement can address, including:
Asset Protection – A prenuptial agreement is well suited for those who have acquired significant assets prior to the marriage and need to ensure these assets remain separate property in the event of divorce. This is beneficial when one person owns more property than the other, as well as when both parties have acquired a lot of property.
A prenuptial agreement can distinguish between each party’s property before they got married from property that was acquired during the marriage. By failing to have a prenuptial agreement, a dispute over whether the property is separate or marital can lead to a lengthy and costly legal battle. In addition, the court may determine that separate property acquired before the marriage has been converted into marital property.
Residential Property – A prenuptial agreement can help to protect any real estate that the parties bring into the marriage. In many cases, a couple may decide to live in a home that one party owned prior to the marriage. In this situation, establishing the home as separate property before the marriage can prevent it from being considered marital property if the parties do not agree that a premarital home will remain the separate property of the owner even if the parties use the home as their residence or make improvements or repairs to the home.
Debts – If one or both parties have accumulated debt, it is important to clarify that neither party will be responsible for the other party’s debts. A prenuptial agreement can maintain the boundaries between each party’s debts unless the non-debtor spouse lends his or her credit to allow the debtor spouse to refinance the debt or otherwise assumes liability for the debt.
Blended Families – Today, many individuals who enter into second or third marriages may have children from a prior marriage. By having a prenuptial agreement, it is possible to preserve the children’s inheritance rights to separate property and to protect premarital property from claims against a separate property by a second or third spouse under state inheritance laws in Alaska.
Business Ownership – For business owners, it is essential to clarify that a premarital business will remain separate and not marital property after the marriage.
In the end, marriage is considered to be a contract under state law, which means that each spouse is entitled to automatic property and inheritance rights. For this reason, it is essential to have a prenuptial agreement in place to clarify what is separate and marital property. Without a prenuptial agreement, the court will divide property according to the equitable distribution laws of Alaska. Finally, for a prenuptial agreement to be considered enforceable by the court, it must be fair and reasonable and each party must enter into it without duress or undue pressure.
Experienced Family Law Attorney
For over twenty-six years, Peggy Roston has been advising couples on how to create prenuptial agreements. Although discussing such an arrangement is not very romantic and can stir up mixed emotions, doing so can improve the level of trust between a couple, help them plan for the future, and minimize the potential for disputes.
Located in Anchorage, Law Offices of Peggy A. Roston clients in Fairbanks, on the Kenai, in the Mat-Su Valley and throughout the state of Alaska. Contact Peggy for a consultation today.