A carefully drafted prenuptial agreement can provide clarity and peace of mind for couples entering marriage that have substantial wealth, successful business interests or potential inheritance. Terms of prenuptial agreements address the division of assets, debts, and financial responsibilities in the event of divorce or death.
Key requirements for a valid prenuptial agreement in Indiana
In Indiana, prenuptial agreements are governed by the Indiana Uniform Premarital Agreement Act (IUPAA). To ensure enforceability under Indiana law, a prenuptial agreement must meet the following criteria:
- Written and Signed: prenuptial agreements must be both in writing and signed by both parties before the marriage.
- Complete and Transparent Financial Disclosure: Each party must fully disclose their assets, liabilities, income, and debts. Failure to do so can render the agreement unenforceable.
- Fair and Reasonable Terms: The agreement should not be unconscionable or grossly unfair to one party at the time of execution.
Voluntary Execution: Both parties must enter into the agreement voluntarily, without coercion, duress, or undue influence.
What can be included in a prenuptial agreement?
Prenuptial agreements should include terms for controlling assets and debts, including:
- Division of Tangible Assets: Determining how personal property (chattels) and household goods and furnishings will be divided upon divorce or death.
- Division of Real Estate: Preserving real estate owned premarital, family-owned farms or businesses, commercial real estate and even real estate purchased during the marriage.
- Division of Intangible Assets: Intangible assets include financial accounts, business interests, retirement accounts, and more.
- Spousal Support: Establishing terms for spousal maintenance, including modifications or waivers.
- Estate Planning: Protecting inheritance and gifts and preserving provisions of wills, trusts, and life insurance policies.
Debt Responsibility: Assigning responsibility for debts incurred before or during the marriage. - Attorney fees: Terms may and often include each party paying her/his own attorney fees in the event of a divorce.
However, certain provisions are not enforceable, such as those that:
- Pre-determine Child Custody, Parenting Time or Child Support: Courts alone retain the authority to decide these matters based on the child’s best interests. Thus, terms that pre-determine custody, parenting time or child support are voidable.
- Encourage Divorce: Clauses that provide incentives for divorce are against public policy. Again, these terms are not automatically void but are voidable.
- Include Personal Lifestyle Clauses: Provisions that try to control personal behavior, such as appearance (fitness, weight) or conduct, intimacy, are generally unenforceable.