Davenport Evans: Prenuptial Agreements – Sarah Richardson Larson
Sioux Falls Estate Planning lawyer Sarah Richardson Larson discusses Prenuptial Agreements at Davenport, Evans, Hurwitz & Smith Law Firm. TRANSCRIPT available via YouTube: Hello, my name is Sarah Richardson Larson. I am an attorney with the Davenport Evans Law Firm and primarily practice in estate planning. My work includes helping clients with prenuptial agreements. Prenuptial agreements can also be referred to as premarital agreements, anti-nuptial agreements, or more informally a prenup.
The prenuptial agreement is a legal document that establishes the property rights of each spouse in the event of a divorce and may also address what is to be left to a surviving spouse at death.
Although any couple may choose to use a prenuptial agreement, they are commonly used in two situations. The first is a marriage between a couple later in life. It may be a second marriage where one or both of the parties have children from a prior relationship. In this situation, the prenuptial agreement may clarify what separate property each party will retain if they divorce and what separate property each may be able to leave to their children at death. Even couples with modest assets may find this a wise choice.
Prenuptial agreements can also be useful for a younger person who has not yet acquired substantial assets but who will likely be inheriting or receiving gifts from affluent parents – perhaps a family business or farm. A prenuptial agreement can be used to protect not only assets held at the time of the marriage but also assets received in the future, as well as future earnings of a spouse.
If a prenuptial agreement is being considered, it is recommended the couple visit about the agreement well before becoming engaged. If parents wish their children to enter a prenuptial agreement, it is wise for them to visit with their children about that expectation before a child becomes engaged or is in a serious relationship. If one waits until after the engagement, the message conveyed may be that the parents disapprove of the intended spouse. Early communication helps the process significantly.
Prenuptial agreements are valid in South Dakota, but a number of conditions must be present. Prenuptial agreements must be in writing and must also be entered voluntarily and without duress. A rule of thumb is to have the prenuptial agreement signed before the wedding invitations are sent. If the couple has sent the invitations, received gifts, and wedding vendors are paid at the time one of the parties insists the other sign a prenuptial agreement, a claim of duress may have more likelihood of success.
The couple must understand the terms of the prenuptial agreement. There must be a full and fair disclosure by both parties of their assets and liabilities, or if seeking to protect future inheritances, the possible inheritance. Further, the prenuptial agreement cannot be unconscionable. The courts do not want one spouse to walk away with millions of dollars and the other to walk away with nothing – especially after a long-term marriage. It is recommended that both husband and wife have separate counsel to advise them. This makes a claim that one did not understand the terms of the prenuptial agreement less likely to succeed.
In the event of divorce, South Dakota courts will consider a number of factors in determining the equitable division of assets. These factors include the length of the marriage, the health and age of the parties, the contribution by each party to the acquisition of the marital property, how the assets were acquired, and the current and future earning capacity of the parties. Fault is not a factor.
Applying these factors can be contentious and expensive in a divorce action. The parties of a prenuptial agreement may spell out in advance how their property and debts will be divided in the event of a divorce. A prenuptial agreement is designed to avoid argument, eliminate the need for expensive appraisals, and reduce the bitterness in a divorce action.
If you would like to learn more about prenuptial agreements, please contact a Davenport Evans lawyer at 605-336-2880 or visit davenportevans.com.
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