If you recently became engaged, you might be wondering whether you should enter into a prenuptial agreement with your soon-to-be spouse. While many people think that prenups are only for high net-worth individuals or celebrities, this is not the case. Any couple who wishes to protect their assets coming into a marriage, outline their financial expectations for the marriage, and avoid a lengthy courtroom battle in the event of divorce could benefit from signing a prenup.

What is a Prenuptial Agreement?

A prenuptial agreement, also called an antenuptial agreement, is a contract that is entered into between prospective spouses prior to marriage and becomes effective upon the date of the wedding. It can address a wide variety of financial issues related to marriage, including alimony, property division, insurance policy benefits, gifts, and inheritances. The document can specify what assets would be considered separate property and what would be defined as marital property in divorce.

In order for a prenup to be valid in Minnesota, it must meet certain criteria, including the following:

• The prenup must be in writing
• The document must be signed voluntarily by both parties
• The prenup must be signed by two witnesses
• The document must be notarized
• The terms of the prenup must be fair to both parties at the time of signing as well as the time of enforcement
• Full disclosure of each party’s finances must be made

Each party must have had the opportunity to seek their own counsel before signing the prenuptial agreement. Importantly, a prenup must be signed a reasonable amount of time before the marriage, which is presumed as reasonable if signed at least 7 days prior to marriage as of August 1, 2024. In the event the validity of the prenup is called into question during a divorce case, it could be rendered null and void if it was signed under duress — or is unfair and one-sided.

It’s critical to understand that a prenup cannot contain terms that violate public policy or involve child custody and support matters. Issues involving children are determined at the time they arise and are decided based on what is in their best interests.

Why Should We Do a Prenuptial Agreement?

There are many reasons to enter into prenuptial agreement with a prospective spouse. For example, if one party earns substantially more than the other or comes into the marriage with substantially more assets, they might want to protect their wealth if divorce should arise. Any property acquired during the course of the marriage is considered marital property, including income, absent a prenup that specifies otherwise. Similarly, if one party has excessive spending habits or is coming into the marriage with significant debt, the other might want to safeguard themselves from debts incurred by their spouse.

But prenups don’t always have to do with planning ahead for a possible divorce. They can serve the crucial purpose of encouraging spouses to have open and honest communication about finances — this is vital for a successful marriage. Since both partners must fully disclose their finances before a prenup can be signed, each can gain a better understanding of the other’s financial situation and discuss their goals for the future.

In addition, a prenup can be used in connection with estate planning. This can be particularly important for a spouse who has children from a previous marriage to help ensure those children are provided for in accordance with their wishes.

What Happens if We Don’t Do a Prenup?

Although there are many advantages to entering into a prenuptial agreement before marriage, spouses who failed to sign a prenup will still have the option of executing a postnuptial agreement after the wedding has taken place. A postnup effectively serves the same purpose as a prenup, except that it can be executed at any time during the course of the marriage. Minnesota requires a postnup to have an attorney for each spouse.

If there is no prenup or postnup in place, Minnesota law would govern how property is divided in divorce, unless the spouses can reach a settlement agreement outside of court. If you have documentation of your assets and home value at time of marriage, that will help you prove your premarital interest in assets and show that they still exist. If premarital assets are combined with marital assets, it becomes more challenging to prove the premarital assets exist later. And how assets are used during the marriage can change the nature of the premarital assets. Minnesota is an equitable distribution state, which means property acquired during the marriage is divided in a way that is fair to both spouses. However, this does not necessarily mean that assets will be divided equally, although that is quite common. A prenup can override these laws and establish how the couple would prefer their property to be distributed.

Although it is best to sign a prenup to avoid the potential for lengthy and costly conflicts, the collaborative divorce process can offer spouses a method to reach a mutually beneficial settlement amicably and peacefully. Mediation can also be an option that allows spouses to explore creative solutions to property division matters. Additionally, both mediation and the collaborative process can address issues that couldn’t be decided in a prenup, such as child custody and support. Better understanding how Minnesota treats assets in a divorce, might help you manage your assets in a way that informs your decisions going forward if you do not want to do a prenuptial agreement.

Contact Divorce and Family Law Attorney Louise Livesay

A valid prenuptial agreement can help ensure open and honest communication with your spouse before marriage — and reduce the potential for conflicts over asset division during the divorce process.

Family attorney Louise Livesay has represented families in the Twin Cities area for matters concerning prenuptial agreements for over twenty years and has dedicated her practice to helping clients resolve divorce matters peacefully and respectfully. One attorney can not represent two people in a prenuptial agreement. Louise has people to refer a fiance to for legal advice and focus on not making the prenuptial agreement a divisive issue prior to marriage.

Louise offers the workbook resource “Designing Our Future Together” to help couples talk through the issues and planning the next chapter. If you have questions about prenuptial agreements, collaborative divorce law, divorce or family law mediation, or if you're interested in our Unbundled Legal Services, we encourage you to contact us online for a consultation or by calling (651) 344-6100. We are available to meet in person or via Zoom, no matter where you are located, even outside of Minnesota.