Prenuptial agreements (a/k/a marital property agreements) permit spouses to “opt out” of Wisconsin’s community property laws. In Wisconsin, virtually all of a married couple’s property and debts are available for division in divorce. With a prenup, the couple can label certain property as individual, as opposed to community property. If they divorce, individual property remains with the spouse in whose name it is held, and is not divided between spouses. The purpose of the law is to allow couples to plan their financial relationship, and hopefully provide clarity if a divorce occurs. In reality, few couples choose to execute a marital property agreement, mostly because it is still viewed as somewhat distasteful to anticipate a divorce even before the marriage occurs. Even if a marital property agreement exists, disagreements are still common unless it is drafted with the utmost care.
A prenup is presumed enforceable at divorce. In order to maintain its enforceability, the agreement must be equitable both procedurally and substantively. Procedural fairness requires that the couples disclose their respective assets, and that neither is under duress. The prenup must also be subjectively fair, in that it must be reasonably related to the spouse’s circumstances and contributions to the marriage. If circumstances change significantly during the marriage, the prenup may not be enforced.
Because most married couples experience significant change over time, it is vital for both spouses that the marital property agreement be drafted as clearly as possible, with full disclosure. If the purpose of the agreement is to create certainty at divorce, entering a vague or limited prenup does no good. Both parties should have attorneys and give full financial disclosure. The terms should be clear and comprehensive, and fully explained to both spouses. It should not be drafted on a napkin two minutes before the vows. Couples spend an inordinate amount of time on every detail of the wedding; the prenup deserves the same attention. It should be drafted and reviewed by experienced attorneys, who will help the spouses consider all current and future possibilities. I have substantial experience working with prenuptial agreements, and would be happy to consult either spouse concerned about protecting his or her rights.
- How Estate Planning for a Family May Trap the Unwary Practitioner - September 21, 2022
- What Everyone Should Know about the New FDIC Regulations - September 13, 2022
- The Inflation Reduction Act - September 8, 2022
By Appointment Only
All Mail Should be Directed to the Middleton Address