The November issue of Money Magazine published an article “Marrying Finances – For the Second Time.” Karen Cheney points out tree instances “When a Prenup makes Sense:
- … have a family business.
- … have vastly more savings than your spouse.
- … have kids from a previous marriage.”
Premarital Agreements are enforceable contracts under Maryland Law. However, the parties to a premarital in a fiduciary relationship requiring one of the two following elements to be enforceable:
- The agreement must be fair to the weaker party at the time of execution; or
- The agreement must be executed voluntarily and with fair financial disclosure.
In addition, the contract must contain all the necessary elements of a valid contract. Three additional requirements necessary for a Premarital Agreement are:
- Both parties must have legal capacity to contract and the assumption is that an adult is mentally competent.
- There must be consideration for the contract. However, marriage itself is a valuable enough benefit that no other consideration is necessary.
- The contract must be executed voluntarily, without fraud or duress.
Fairness and disclosure are key elements to the premarital agreement. As Estate Planners the most common situation we deal with is the second marriage where both parties want to ensure that their assets pass down to their children. Proper planning is necessary to ensure that all the children are treated fairly. Adult children often have a difficult adjustment to seeing Mom or Dad getting remarried. If they feel they are being cheated out of their inheritance, the resentment of the new spouse can hinder the family relationship. Our office can coordinate the Premarital Agreement with as Estate Plan that accounts for the assets both parties are bringing to the marriage.