Prenuptial, or Premarital, Agreements are legally binding contracts entered into by couples before they get married to each other. They are also called Marital Reclassification Agreements. The purpose of a Prenuptial Agreement is to opt out of marital property laws in whole or in part. Most prenuptial agreements establish the financial rights of each spouse in the event of a death or divorce. It is important to note, however, that unless a Prenuptial Agreement specifically discusses what happens in the event of a divorce, it does not necessary apply in a divorce. If all requirements are met, however, prenuptial agreements are generally found to be valid in Wisconsin.
Some common circumstances where prenuptial agreements are entered into are when one spouse is significantly wealthier than the other spouse, when a spouse has children from a different marriage or relationship, when one spouse has a family business he/she wishes to protect from the other spouse in the event of divorce, or when one spouse has significant debt that the other spouse does not want to be responsible for in the event of divorce.
Pursuant to statute, Wisconsin law presumes that all assets shall be divided equally in the event of a divorce. However, a Prenuptial Agreement could overcome that presumption if it specifically addresses what happens in the event of a divorce and if the court determines that it is a valid Prenuptial Agreement that will be upheld in a divorce. Additionally, it is important to know that parts of a Prenuptial Agreement may be upheld by the court, while other parts may not be. The court has the discretion to uphold all, none or only parts of the Prenuptial Agreement.
When deciding whether to uphold a Prenuptial Agreement, the court must insure that certain requirements and standards are met in order for all or part of a Prenuptial Agreement to be enforced and upheld at the time of the divorce. Some of the factors that the court looks at to determine whether a Prenuptial Agreement should apply in a divorce are whether or not the agreements were fair at the time of the signing of the Agreement (i.e. did the parties knowingly and voluntarily enter into the agreement?), whether there was a complete financial disclosure by both parties, whether both parties had adequate legal representation and whether or not a Prenuptial Agreement is fair at the time of the divorce (i.e. has their been a substantial and unforeseeable change in circumstances?).
An example of a situation that may be scrutinized for lack of fairness at the time of entering the agreement is the following: When the husband-to-be is insisting on a Prenuptial Agreement and only presents it to the bride-to-be on the eve of the wedding day (guests have already come to town, non-refundable deposits have been paid). In that circumstance, the bride-to-be may sign the Agreement without sufficiently reviewing the Agreement, without fully understanding the Agreement and her rights under the Agreement and without fully grasping what she is giving up in the future. In the case, the court may decide not to apply a Prenuptial Agreement in a divorce.
If you have questions about a Prenuptial Agreement in a divorce, please call our office at 414-258-1644 to schedule a free half-hour consultation with an attorney.