What Is a Prenup?
Prenuptial agreements, also referred to as premarital agreements, are contracts made between individuals in contemplation of marriage. The purpose of these agreements is to establish terms that will govern the parties’ financial and other legal rights and obligations that arise during the marriage or perhaps upon its termination, without the need for costly and protracted litigation. While prenups govern the same issues as postnuptial agreements, there are key distinctions between the two. For example, a postnuptial agreement may be binding on a party only if it is approved by a court, a separate document may be necessary to address alimony, and there is a statutory law governing marriage settlements that requires a postnuptial settlement agreement to be approved by a court .
Tennessee law allows individuals contemplating a marriage the ability to enter into an agreement that defines his/her rights before, during, and after the marriage. This agreement can be enforced in the event of separation or divorce but not if the court in a divorce simply disapproves of its terms. A premarital agreement becomes effective immediately upon marriage. If the parties wish the prenup to take effect before the ceremony, it is executed as a separate document. If the parties want the prenup to take effect at the time of marriage, it is connected to the marriage license and solemnization.
The Law on Premarital Agreements in Tennessee
The legal framework for a prenuptial agreement in Tennessee is governed by state law. Specifically, the Tennessee Uniform Premarital Agreement Act outlines the requirements and limitations surrounding prenups. The Act provides that prenuptial agreements are enforceable as long as they are in writing and signed by both parties. However, the Act also requires that the terms and conditions of the agreement were agreed to voluntarily by both parties, and that there is a full disclosure of assets.
Unlike some other states, Tennessee law does not require a prenuptial agreement to be notarized or include a provision to be married by a specific date. In addition, Tennessee law does not require that a prenuptial agreement be executed separate and apart from the ceremony. In some states, prenuptial agreements that have not been notarized and that have not included provisions to be married by a certain date have been held to be unenforceable.
Even though a prenuptial agreement may not require the same formalities in Tennessee, one thing is certain: prenuptial agreements in Tennessee are subject to the statute of frauds, which requires an agreement to transfer real property to be in writing and signed by the party to be charged. By including a provision concerning the treatment of real property, parties to a prenuptial agreement would be able to avoid the application of the statute of frauds.
The Advantages of a Tennessee Prenup
A prenuptial agreement has several advantages in Tennessee that highlight its usefulness. When entering into this legal contract with your partner, you should have the right to determine how to divide property you brought into the union. You have the ability to pass on your family’s legacy by placing inheritances and gifts in the right hands. If you enter into the prenuptial agreement with a business you owned, you can protect it from any undue influence by your partner. Additionally, you have the ability to state how any debts that are acquired through the marriage will be divided to avoid placing an undue burden on your partner.
With a prenuptial agreement, you can help ensure that your possessions are distributed as you wish in the even of a divorce. You can also create terms for alimony with a prenuptial agreement. Any provisions that directly contradict Tennessee state law will not be enforced, but having a prenuptial agreement can go a long way toward clarifying expectations in a marriage with your partner and already ensuring your wishes are followed.
The use of this type of agreement can also save the time and costs associated with litigation if the marriage does not work out. With everything decided in advance, disputes over assets will be less likely and require less time to work out. This can reduce the overall costs of a divorce substantially because lawyers can avoid spending hours on the same asset division issues that were already taken care of in the prenuptial agreement.
Drawbacks and Things to Consider
Despite their usefulness, prenuptial agreements have limitations and potential drawbacks. One major limitation is that a prenup is not enforceable if either party did not fully disclose their assets, income, or debts. If one party did not accurately list their property or hid it from their spouse, then the prenup could be deemed invalid. Furthermore, prenuptial agreements must be signed voluntarily and without coercion. If one party was forced to sign the agreement or was under duress, the agreement may not hold in a divorce proceeding.
In addition to these limitations, there are some situations in which a prenuptial agreement may not be enforceable in Tennessee. For example, if the prenuptial agreement is unconscionable or oppressive, it may not be valid. This means that if the terms of the agreement are so one-sided or unfair that they leave the other party with no means of support, the court may not uphold the agreement. Likewise, if the prenuptial agreement was entered into fraudulently or from misrepresentation, it will likely be invalidated.
When considering whether to enter into a prenuptial agreement, couples should think about whether their agreement truly reflects their intentions and the realities of their individual situations. Understanding the limitations and potential drawbacks of prenups can help couples make a more informed decision about whether or not to enter into such an agreement.
The Process for Creating an Antenuptial Agreement
- Select Legal Counsel. Obtain an attorney to review the prenuptial requirements in the state where you now live and those of your fiancée’s state where she now resides. Retain separate lawyers for this purpose. If you and your fiancée want your lawyer to draw up a prenup for your agreement, which is often preferred, then you should each select a lawyer who will represent only you. Anticipate your fiancée may want her own lawyer because it is important that both of you know you have someone on your side who will look out for your interests. A prenuptial agreement is a contract that you and your fiancée will both sign , and it is highly recommended that you both seek separate legal counsel to prepare the agreement.
- Discuss Your Intentions. Make a list of all of your assets and income and present them to your fiancée. You both should discuss your individual debts. Then you should negotiate the terms of the prenuptial agreement with your fiancée before selecting your representative legal counsel to draw up the contract for your signature.
- Understand potential pitfalls of not hiring counsel. It is not uncommon to see a prenuptial agreement that lacks sufficient attention to detail or does not accurately consider the implications of laws in the state in which the contract was being drawn up. These oversights can result in an inequitable distribution of assets upon divorce if the agreement is enforced at all.
Common Myths
Common Misconceptions are aplenty when it comes to prenuptial agreements in Tennessee.
Some may be concerned that having a prenup means the relationship is doomed. Others may think that a prenup is very difficult to formulate in Tennessee. Still others may have heard that a prenup cannot be modified or amended once married. None of these statements are true! Yet the list goes on and on with all of the myths and urban legends even the most informed folks may only partially understand about prenuptial agreements.
So for the next few minutes, let’s put those misconceptions to rest with some short explanations and true statements.
If you have convincing friends or family members that think using a prenup is a bad idea, it may be time to find some new ones! Ask most lawyers to sit down with you one time and map out both parties financials on a blank sheet of paper and you might challenge the careers of most attorneys to come up with a fair solution for dividing assets and debt at the end of the day. The goal is to come up with solutions that will minimize the amount of time wasted (through attorneys) and money spent (on legal fees). If a prenup gets you there with specific terms that are agreed upon before the marriage, then it is giving you a framework and a head start to begin your marriage together as partners in making decisions as a team. It is not a death notice and to think of it like that is to not fully understand that marriage is a full-time job and sometimes it needs help too.
You’ve been told that you need to wait until you are married to have a valid agreement? Not true! In fact, I have prepared agreements for people who have already been married for years. Clients change jobs and status and life circumstances over time and prenuptial agreements are drafted into fine detail and need some periodic adjustment and revision to remain relevant. Drafting one as if you were "in a hurry" might make sense but it certainly is not something that should ever be taken lightly after putting off until the last minute in anticipation of exchanging vows.
Prenuptial agreements in Tennessee are valid and enforceable once both parties are married and are determined to be in full force and effect. However, keep in mind that initial signings or other relevant events may be necessary to extent documents from time to time.
No one should ever enter into a binding contract unless it is fully understood. If you do not get an attorney to review your agreement before signing, it is possible for you to save some attorney fees, but at a great risk. All the savings in the world will not matter once you have regrets when you need help. Use caution with online sites that offer "free or cheap" contracts that have been used perhaps thousands of times already but are just a "one size fits all" approach to agreements.
Modification or Termination of a Prenuptial Agreement
Couples may revise or cancel a prenuptial agreement at any time during the marriage so long as they do so in writing and both parties consent in writing to the modification and grant their respective consent voluntarily and with full knowledge of their rights, including an express waiver of their right to challenge the validity of the agreement . It is also required that the revised or new prenuptial agreements be signed by both parties in accordance with all of the same formalities that apply to an initial agreement.
A revised or new agreement can be drafted before a couple marries or afterwards, even after a couple enters into a postnuptial agreement.