Prenuptial agreements — also called premarital agreements and antenuptial agreements, and prenups for short — are agreements that people intending to get married make that will be effective when they marry. They are enforceable like contracts in the courts. Your state may have specific written requirements about them — in my state (New Mexico), we have the “Uniform Premarital Agreement” Act which was passed in 1995 — and then those written requirements are interpreted by judges if the spouses later disagree about what they meant in their agreement. It’s important to know what is specific about prenups in your state, in statute and court opinions! This article talks generally to give you some things to check out with your local attorney, like a divorce lawyer Santa Fe, NM trusts.
Mostly, usually, prenups are about what will happen with the spouses’ assets and debts (what they already have and owe), and income and expenses (what comes in and must be paid out on a daily basis), during a marriage. They also usually consider assets and debts that might happen in the future, and increasingly are an important tool used as part of estate planning for the spouses to know very clearly how assets will be distributed when they die — used by older couples perhaps remarrying after earlier marriages with children. You have to know the purpose of the prenup: prenups requested by the younger may be made in anticipation of divorce; prenups requested by the older may be made in anticipation of how clarifying how much of the assets will pass to a surviving spouse and how much to the deceased’s children (who are not the surviving spouse’s children) on their death.
Mostly, anything the prospective spouses agree to will be considered within their legal rights to do, so long as they were aware of what they were doing and not under duress. There are at least 2 very major exceptions to that possible depending on your state’s law. In my state, for example, agreements must not go against “public policy”, and, further, the agreement “may not adversely affect the right of a child or spouse to support, a party’s right to child custody or visitation, a party’s choice of abode or a party’s freedom to pursue career opportunities.”
Where does a personal injury award come into this? Most prenups declare what property (assets) of each is “separate” — usually, the property owned by each at the time of marriage remains separate — and which is marital or community — usually the property that comes to either of them after the time of the marriage, during the marriage. But sometimes the spouses might want to keep separate some of the property that comes into the marriage, that might otherwise become marital, which can be done by a prenup.
What about that personal injury award? If you were anticipating a possible divorce, you might want to be sure that award was characterized as separate property — remember that the award is compensation, in part, for treatment you might need years later, and if you are divorced you might not have as much financial support for needed treatments as when you were married. If you were anticipating wanting to help both a surviving spouse and your children, and if you felt a child from an earlier marriage was not well enough provided for, you might also want your spouse’s up front agreement that such unplanned-for money would go to your children when you died.
Thanks to our friends and contributors from Gini Nelson Law Office for their insight into personal injury awards and prenuptial agreements.