We wish to start by saying congratulations if you are reviewing this page in anticipation of an upcoming marriage!
Prenuptial Agreements (also known as Antenuptial Agreements) are akin to having an insurance policy for your marriage. When entering a marriage, the State of Minnesota views all assets, debts, and income as shared property between spouses commencing the day of marriage. Though inheritance and non-comingled assets are considered non-marital property, spouses inadvertently co-mingle these assets or debts throughout the marriage. This commingling of assets subjects it entirely to marital property for equitable division during a divorce.
Prenuptial Agreements are one of the most empowering documents ensuring a bright financial future as a married couple. This agreement offers a chance to discuss finances before marriage. It ensures that spouses are aware of their financial commitments to each other. It provides a detailed outline of which assets and debts will be divided. The agreement explains how the division will occur in the event of a divorce. Like an insurance policy, a Prenuptial Agreement ensures that both soon-to-be spouses have taken time to consider potential outcomes. They contemplate each other’s future in the worst-case scenario to minimize unanticipated surprises. Protecting assets and debts while clarifying financial expectations fosters financial harmony in a marriage.
What Can a Minnesota Prenuptial Agreement Protect?
A properly drafted Prenuptial Agreement replaces Minnesota’s statutes with the spouses’ carefully considered set of rules for division of property to minimize disputes should either spouse requests a divorce. The Prenuptial Agreement clarifies with particularity the following:
- Nonmarital property by detailing what property exists, the value of the property, and how it will be treated during a divorce,
- The manner in which assets and debts will be divided in a divorce,
- Outline whether a spouse will be required to maintain credentials or education should they leave the workforce,
- Methods for calculating spousal maintenance instead of leaving it to the court’s decision,
- Determining whether and how much a spouse receives inheritance upon death of the other spouse, and
- Other important methods for dividing assets and debts.
Further Information
Protecting Nonmarital Property
Of the many frustrating things for spouses during a divorce, one of them is the lack of documentation needed to assert non-marital interests in property owned prior to marriage. A spouse claiming non-marital interest exists is required to prove their claim. If records are lost and irreplaceable due to the passage of time, the non-marital claim may not survive a divorce. A properly executed Prenuptial Agreement can serve as the documented proof necessary to show the value of the asset.
Absent a Prenuptial Agreement, non-marital property could be co-mingled. Co-mingling occurs when a spouse deposits non-marital funds into the same account income is deposited to. This may result in an equitable division of the funds in such account in full instead. Arguments around co-mingled property can be contentious and expensive to determine. The help of an expert may be necessary to trace funds going in and out of an account. Such experts may include a Certified Public Accountant.
Set Workforce Participation Expectations
Prenuptial Agreements cannot eliminate spousal maintenance. Instead it can establish guidelines to minimize the impact spousal maintenance may have. For example, a Prenuptial Agreement may require both spouses maintenance of certifications or education requirements if either exits the workforce. Additionally, a Prenuptial Agreement can provide alternative methods for calculating spousal maintenance and setting the expectation for duration of spousal maintenance.
Waive Rights to an Augmented Estate
Under Minnesota Law regarding “Augmented” estates, a surviving spouse can still claim a deceased spouse’s estate. This is possible even if a will clearly disinherits the spouse. With a Prenuptial Agreement, spouses can demonstrate their intention to waive rights to their share of their spouse’s estate. This intentional waiver offers the Court additional assurances that both spouses knew and understood their waiver to the Augmented Estate, such that it could be more easily enforced. If spouses decide to restore each other’s rights to the “augmented estate” the Prenuptial Agreement can outline the steps necessary for such restoration of rights as well.
Drafting a Valid Prenup in Minnesota is Complicated
Minnesota has strict rules for drafting and enforcing Prenuptial Agreements. Minnesota requires fairness, equitability, and full disclosure of all finances. In addition to complete knowledge of all assets and debts, the parties must enter the agreement with full knowledge and understanding. Additionally, each party should have independent legal counsel.
At the Law Office of Tiffany Dust, we provide experienced, personalized guidance pertaining to Prenuptial Agreements in Minnesota.