Premarital agreements (also called “ante-nuptial” agreements) are legally-binding contracts entered into by an engaged couple prior to marriage. Prenuptial agreements accomplish the twin goals of asset protection and guaranteeing inheritance by children of a prior marriage. They can be vital estate-planning and wealth-preservation tools.
These agreements are typically neutral. That is, they give each party the same rights and treat both identically. They can allow a person to keep pre-marriage assets as separate from a new marriage as the parties desire. They can also allow a spouse to protect his or her children’s interests in their inheritance more effectively.
Marriage confers certain rights on the parties, including the right to claim one-third of the spouse’s estate at death (regardless of the terms of the deceased spouse’s will) and certain rights in the other’s real estate. As a result, the party owning the real estate cannot sell or mortgage it without both spouses’ signatures on the deed or loan documents. Finally, each spouse has a right to a share of the marital property if the parties divorce.
The purpose of a premarital agreement is to modify or waive these marital rights before they accrue. Essentially, each party agrees that he or she will have no claim against the property of the other spouse brings into the marriage. This means that neither spouse can claim a share of the other’s property at death. It also means that in the event of a divorce, each spouse will get to keep the assets he or she brought into the marriage. The joint property acquired after the marriage generally is split equally upon divorce, just as if there were no premarital agreement.
Iowa law requires that each party be separately represented by an attorney at the time a premarital agreement is drafted and signed. As a result, the agreement is generally unassailable after marriage. Iowa courts have looked unfavorably on a spouse who claims that he or she was “coerced” into signing a premarital agreement. The contract will be binding.
Previously thought of as a legal vehicle for only the wealthy, premarital agreements have become a popular and effective vehicle for people looking to protect their assets. These agreements are becoming more commonplace as people attempt to protect the potential inheritance of their children. Such an agreement, when properly prepared, can accomplish this and allow the wishes of your will to be followed.
Information provided by Ross Barnett, attorney for Abendroth and Russell Law Firm, 2560 73rd St., Urbandale, 278-0623, www.ARPCLaw.com.