A few decades ago, prenuptial agreements were widely believed to be only for couples in which one or both future spouses were very wealthy. Today, one-third of people polled said that they would consider asking a partner to sign a prenuptial agreement. Many more couples are choosing to decide together, prior to getting married, what will happen to their property and debts if their marriage ends.
If you live in Indiana and are considering marriage, you should know how a prenuptial agreement works in your state. This article will describe the issues an Indiana prenuptial agreement can cover, and how courts decide whether or not to enforce a prenuptial agreement upon divorce.
Prenuptial agreements, also called "premarital agreements," are legal contracts signed by two people who plan to marry, to settle their property rights during or after marriage. A prenuptial agreements goes into effect when the couple gets legally married.
Some couples shy away from prenuptial agreements, believing they are unromantic at best, or increase the likelihood of divorce at worst. Studies have shown, however, that they increase domestic happiness by allowing couples to reduce uncertainty about financial issues ahead of time, and focus on other aspects of their relationship.
People with significant assets prior to marriage may want a prenuptial agreement to make sure they retain those assets in the event of a divorce. People with children from a prior relationship often use prenuptial agreements to protect their inheritance rights. Prenuptial agreements are no longer only for the extremely wealthy; people with modest assets may actually find it more important to decide how each partner will be protected than people with large amounts of wealth to divide if their marriage ends.
Of course, a couple's property and debts will be divided if they divorce, whether or not the couple has a prenuptial agreement. However, a prenuptial agreement allows the couple to decide on a division that makes the most sense for them, based on their unique circumstances. Absent a prenuptial agreement, the couple's property and debts will be divided by a judge, according to general rules set out in state law.
Prenuptial agreements in Indiana may provide for any of the following:
Indiana law doesn't allow couples to decide child support in a prenuptial agreement. All parents have a legal and moral obligation to support their children, and that obligation can't be contracted away in an agreement. Although child support is usually paid from one parent to the other, the right to receive child support actually belongs to the child. Therefore, neither parent has the right to agree that the other does not have to pay child support.
Similarly, Indiana law doesn't allow for parents to decide child custody as part of a prenuptial agreement. Custody is determined based on what is in the child's best interests at the time of divorce or separation. Parents can agree on custody when they split, but not before they marry, and certainly not before the children are born.
Indiana is one of many states that has adopted the Uniform Prenuptial Agreement Act (UPAA), a set of guidelines judges use to determine whether a prenuptial agreement will be enforced. Under the UPAA, all Indiana prenuptial agreements must be in writing and signed by both spouses.
In general, future spouses should negotiate the terms of their agreement well before the wedding day, and each spouse should be represented by counsel. The agreement should describe the property owned by each spouse at the time of the wedding. The agreement should state what will happen to their property in the event of divorce or death; agreements that state only what will happen in the event of death are not enforceable.
Conversations that spouses have before signing a prenuptial agreement are not part of the agreement. If a spouse verbally promises to take care of the other financially, but that promise is not part of the written agreement, the court will not enforce that promise. If a couple wants to change the terms of a prenuptial agreement after they are married, they can do so by putting the new terms in writing and signing the new agreement.
Courts will generally enforce prenuptial agreements. If there are any dispute over what the agreement requires, the judge will generally try to determine the parties' intentions. If there are unclear terms in the agreement, the judge will consider other evidence, like documents or testimony from the spouses or the attorneys who drafted and reviewed the agreement, to determine what the spouses intended.
The court may invalidate (throw out) a prenuptial agreement if one spouse did not sign the agreement voluntarily. The court will find that a spouse signed the agreement involuntarily only if that spouse was physically threatened or otherwise left no choice but to sign the agreement. It's not enough that a spouse threatened not to marry the other; there must be an actual threat of physical or psychological harm.
The court can also invalidate a prenuptial agreement if the agreement was "unconscionable" at the time it was signed. An agreement is unconscionable if it is so unfair that it would be an injustice to enforce it; it will only be thrown out in extreme circumstances. For example, an agreement that provides no support whatsoever for a dependent spouse, to the point where that spouse must receive public assistance to survive, may be thrown out as unconscionable. A court won't throw out a prenuptial agreement simply because one spouse is left with very little after the divorce.
If you have signed a prenuptial agreement that you believe may be unconscionable, or you have other specific questions about Indiana prenuptial agreements, you should contact an Indiana family law attorney for advice.