What Constitutes a Prenuptial Agreement?
A prenuptial agreement, sometimes called a "premarital agreement", or in some states, a "marital property agreement", is an agreement between two persons who expect to marry, with or without the involvement of counsel. Washington has adopted the Uniform premarital Agreement Act, RCW 26.18.010. The law provides that the parties may enter into a written agreement before their marriage legally describing the following:
(a) The rights and obligations of each of the parties in any of the property of either or both of them, whenever and wherever acquired;
(b) The right to manage and control the property, whether jointly with or separately from the other party;
(c) The disposition of property upon separation, marital dissolution, death, or the occurrence or nonoccurrence of any other event;
(d) The establishment of the method of valuing property and obligations for the purpose of appraising current value or dividing or distributing property upon separation, marital dissolution, death, or the occurrence or nonoccurrence of the specified event;
(e) The making of a will, trust , or other arrangement to carry out the provisions of the premarital agreement;
(f) The ownership rights in and disposition of property upon separation, marital dissolution, death, or the occurrence or nonoccurrence of the specified event;
(g) The requirements for providing for education, health care, and child care;
(h) The limitations, if any, on the authority of either of the parties with regard to debts and obligations that may be incurred or encumbered;
(i) The ownership and disposition of life insurance benefits;
(j) The choice of law governing the terms of the agreement; and
(k) Any other matter, including their personal rights and obligations, not in violation of public policy.
(2) A premarital agreement must be in writing and signed by both parties. It becomes effective upon marriage.
(3) The right to deal with certain types of property as if it were one’s own bestows the complete management and control over that property upon the party vested with the right. Such a right does not grant the right to dispose of each other’s property or to dissipate that property.
Legal Requirements of a Prenuptial Agreement in Washington
In Washington state, a prenup must adhere to certain legal requirements to be considered valid, the most important of which is that it be entered into voluntarily. Every prenup must be in writing, and there must be full disclosure of all property and debts of both parties and the pressuring party must provide the other with the ability to have and actually have independent legal counsel prior to signing the document.
In some situations, if one party did not have legal counsel prior to signing it can be presumed the agreement was not entered into voluntarily and is therefore null and void. The law requires that the prenup be signed voluntarily by both parties with no coercion or other such tactic to make the party sign it against their will. If it can be found by the court that one party entered into the agreement without proper full disclosure, was under duress or that not enough time was provided to the other party, the case may go to court and the prenuptial agreement may be invalidated.
Commonly Included Clauses in a Washington Prenup
Although every couple is different, prenuptial agreements in Washington tend to contain a standard set of provisions. Because prenups must be mutually agreed upon, the clause for every agreement varies.
A typical provision in a Washington prenup addresses the treatment of assets and debts. Couples can agree to declare future property as separate or marital. The fact that an item of property is separate does not mean it will necessarily stay separate in the event of divorce. If you and your spouse decide that something, like a TV set, will remain solely yours no matter what, the agreement should include what will happen if that separated property is damaged or destroyed. Many couples also include a provision that defines what constitutes marital property and what does not.
Spousal support, commonly referred to as alimony, is another common provision in Washington prenups. In this agreement, you and your spouse can determine how much alimony the (the recipient) may receive and for how long. You can also decide if support payments can be modified or also if they should be indexed for inflation.
Any incurred debt is usually covered by providing a clause that identifies responsibility for payment. You and your spouse might agree that anyone acquiring credit cards or other forms of debt before or while married will be responsible for paying it after divorce. If this provision isn’t included in a prenup, anything you or your spouse acquire afterward will likely be considered marital property and subject to property division.
Another provision many couples include is the "sunset clause." This clause typically agrees that the agreement expires after a certain time or under specific circumstances, such as upon a child’s marriage or death. There are other clauses, but these three are the ones most often found in Washington prenups.
If you’re considering a prenuptial agreement in Washington, you want to be sure that you and your fiancé understand your rights and how the provisions in your prenup will affect you personally. While you can include whatever you like, it’s best to work with a lawyer who has expertise in matters pertaining to prenuptial agreements so you can get the outcome that you and your spouse want.
Limitations and Enforceability
In Washington State, certain provisions are unenforceable as a matter of public policy. The most well-known is the prospective waiver of maintenance upon divorce or separation – generally, a spouse cannot agree in advance to waive his or her right to seek spousal maintenance under RCW 26.18.020. In addition, the law prohibits a prospective waiver of child support obligations. Moreover, terms that are illegal, that encourage illegal activity, or that are unconscionable at the time of enforcement will not be enforced by the Court. Other limitations on what may be included in a prenuptial agreement are outlined in RCW 26.18.170 . Along with considering the rules surrounding enforceability, courts may also consider the factors established under the Uniform Premarital Agreement Act outlined in RCW 26.18.050 in order to determine whether terms in an agreement are enforceable. For example, was there a fair and reasonable disclosure of the property or financial obligations of both parties in advance of entry into the (proposed) agreement? In each case, fairness is determined on an objective standard based on the circumstances of each party. In determining whether an agreement was unconscionable, the parties’ ability to understand it is measured by their respective ages, intelligence, education, experience, and the amount of legal counsel they utilized prior to signing it.
How to Create a Prenup in Washington
Regardless of its complexity, all prenuptial agreements go through the same basic procedural steps: (1) consult with an attorney, (2) negotiate with your partner, (3) sign and (4) wait. We shall examine these steps in more detail below.
The first step of the drafting phase involves meeting with an attorney who is knowledgeable about premarital agreements. Each party to a premarital agreement must be represented by counsel. Reasonable attorney fees for the review of the agreement and attendance at the signing are also usually a part of the costs. Failure to have independent legal counsel before signing a prenuptial agreement may make the contract unconscionable.
In addition to advising you with respect to the legal consequences of certain provisions in the agreement, an attorney can also address non-legal issues which may arise. Such issues may range from family concerns to religious beliefs regarding the use of a prenuptial agreement. So long as the agreement is voluntary, the terms can be as unique as the people involved.
The second step is the negotiation phase. It is important to communicate your wants and needs to your partner so that he or she has an opportunity to address any unresolved issues and make concessions if necessary. For most couples, the consultation and negotiation process happens in a single session.
In addition to identifying the practical and emotional value of certain property, you and your partner will need to decide how to divide your individual and joint property in the event of a death (intestate succession) and a divorce. While common items to include are bank and investment and retirement accounts, a divorce and death tend to significantly increase in value over time. Therefore, items such as business and rental properties should be included regardless of whether they have great value at the time of the agreement.
The third step is the signing of the agreement. Both partners must sign the document, even if only one is making a full disclosure of his or her property. It shall become effective upon the marriage. If the contract fails to include a disclosure document, the agreement itself should contain language indicating that the disclosure was made with reference to the essential property. In contrast to marriage, an engagement is not legally binding. Therefore, the last step is merely to wait until you and your intended partner marry.
What Are the Alternatives to a Prenuptial Agreement
While prenuptial agreements can often help to clarify financial rights and obligations, they are not the only option. Some couples may choose to enter into a postnuptial agreement after marriage for any number of reasons. Perhaps circumstances have changed since the marriage ceremony, or perhaps a prenuptial agreement was not feasible prior to marriage. In any case, a postnuptial agreement can help to establish expectations, rights, and obligations for married couples as well.
Co-ownership agreements for real estate are another option. For couples who already own property or who are considering purchasing real estate together, real property co-ownership agreements can be drafted to clarify issues such as expenses, percentages of ownership, liability for debt, and more . Essentially, a real property co-ownership agreement functions similarly to a business agreement in that it establishes the ownership interest and obligations of each party with respect to the jointly-owned property.
In addition to postnuptial or co-ownership agreements, many couples simply choose to address issues such as intellectual property rights, estate matters, investments, and debts during the marriage and not through legal agreements. Of course, engaging in open and honest discussion with a spouse regarding money and other assets is not always easy or desirable, and thus prenuptial, postnuptial, or co-ownership agreements may be worthy of consideration.