What is a Prenuptial Agreement?
A prenuptial agreement is an agreement made by two parties before they enter a marriage, and it addresses the ownership of respective assets in the event that the marriage fails. According to the Supreme Court of Ohio, a prenup is only valid if three conditions are met:
- The prenup was entered into freely and without fraud, duress, coercion, or overreaching.
- Both parties have full disclosure or knowledge and understanding of the nature, value, and extent of the other parties’ property.
- The terms do not promote or encourage divorce or offer a profit for divorce.
If any of these terms are not met, a judge may decide to revoke the entire agreement and proceed with issues such as property division and alimony as if no agreement were in place.
What Does a Prenuptial Agreement Cover?
A prenuptial agreement should address the specifics of property division and spousal support in the event that the marriage ends. Here are a few examples of topics covered in a prenup:
- Division of marital assets
- Division of a familial business
- Dividing or selling the marital home
- The amount and duration of alimony payments
- Rights of inheritance
- Future assets
While some couples choose to include unusual terms such as custody of pets or penalties for weight gain, these clauses typically do not hold up in court.
What is Not Covered by a Prenuptial Agreement?
To ensure that a valid prenup is filed, the following topics should not be included:
- Child custody or support
- Excluding the right to counsel
- Incentive to commit illegal acts
- Incentive to divorce
- Unfair, unjust, or intentionally deceptive terms
- Conditions favoring one party over the other
- Unconscionable alimony provisions
- Any clause that is not financial
A court will not uphold a verbal prenup. An enforceable prenup should be handwritten and signed.
Who Benefits From a Prenuptial Agreement?
A proper prenup will allow both parties to benefit equally. For this reason, both parties must enlist the help of an attorney at Lawrence Law Office to help draft the agreement to protect his or her interests.
How Long Does a Prenuptial Agreement Last?
A prenuptial agreement typically lasts the length of the marriage, although there are exceptions. A prenup can include clauses that expire after a certain time, such as separate property becoming subject to division after ten years of marriage. Other prenups may include provisions that take effect after a certain period, such as agreeing to pay spousal support after five years of marriage.
How are High-Value Divorces Different?
Typically, a high-value divorce is when a couple in a higher income bracket or with a great amount of assets and property, typically valued over one million dollars, gets divorced. This type of divorce typically revolves around property division and spousal support. High-value couples generally have the following things in common:
- The couple has been married for ten years or more.
- One or both parties are aged mid-30s or older.
- All children resulting from the union are independent.
- One or both parties are professionals.
- One or both parties own a business.
- The couple possesses a significant amount of marital property and assets.
What Assets are Divided in a High-Value Divorce?
When a prenuptial agreement is in place, high-value assets are agreed upon, and which party will get the asset in the event of a divorce. Assets that may qualify as high value and are frequently a source of contention during divorce proceedings are:
- Joint, separate, and mixed bank accounts
- Retirement accounts, pensions, 401ks, and IRAs
- Real estate
- Stocks and bonds
- Businesses and companies
- Artwork, jewelry, and collectibles
- Hidden assets
What are Common Issues in a High-Value Divorce?
Spousal support: High-value divorces commonly involve one party having a significantly higher income than the other. Ohio courts use the following factors to determine spousal support or alimony:
- The ability of each party to support themselves
- The current income, assets, and debts of each party
- The contribution of each spouse to the marriage
- Tax consequences for each party from receiving alimony
- The length of the marriage
- The age of each party
- Which party will receive primary custody of any children
- The standard of living of each party during the marriage
- The level of education of each party
- Any other factor that the court deems relevant
Property division: Property division is typically one of the more contentious aspects of a divorce to resolve. First, separate and marital property are divided to ensure each party leaves the marriage with the property that they had prior to the union. Separate property is considered to be property that was individually owned before the marriage, such as real estate. Marital property is considered to be any property that was bought after the marriage or that both parties contributed to, such as a marital home. After clarifying separate versus marital property, a process of fair and equitable distribution of marital assets begins.
Business matters: When a couple owns a business together, an analysis of the business’s assets and liabilities will be calculated to determine an approximate value before making property division decisions and negotiations. Business valuations include analysis of tax returns, payroll, debts, and assets.
The presence of a prenuptial agreement will mitigate most of these issues to ensure a smoother divorce process.
Do I Need an Attorney?
From the drafting process to enforcing the prenup, you need an attorney you can count on. Here at Lawrence Law Office, we are ready to fight for your best interest. Call us today at 614-228-3664 or fill out a contact form for a consultation.
