What You Can Do With a Prenuptial Agreement

Prenuptial agreements are most often used to accomplish the following objectives :

Keep the couple’s finances separate. Every state in the United States has laws which designate certain kinds of assets accumulated during the course of the marriage as either “marital property” or “community property”, regardless of how the property may be titled. If a couple divorces, the marital property or community property will be divided between them, either by agreement or by a judge. If you want to avoid having some or all of your individual assets accumulated during the marriage subject to division by a judge, you can do so, to a greater or lesser extent depending on specific state law, with a prenuptial agreement.

Protect each other from debts. Often one or both parties bring debts, as well as assets, to the marriage. If there's no prenuptial agreement, creditors can sometimes turn to marital property to satisfy the debts of one spouse. A prenuptial agreement may allow you to limit or eliminate your liability for many debts of your spouse in the event of a divorce.

Define who gets what if you divorce. Without a prenuptial agreement, the law of the place that you divorce will generally specify how your property will be divided if you ever divorce, to the extent that the Court has jurisdiction over the property. These laws may dictate a result that neither of you wants. You can use a prenuptial agreement to establish your own rules for property division and avoid potential disagreements in the event of a divorce.

Eliminate or limit the right to claim spousal maintenance (alimony), except in a few States in the United States. A handful of States in the U.S. limit your ability to give up your right to spousal maintenance if there is a divorce. Most States permit such waivers, so you will need to know what your state laws say if you are considering this kind of agreement. The Thai Civil and Commercial Code is silent on the issue and, to date, such provisions have been effective in Thailand and other countries of SE Asia that allow prenuptial agreements.

Keep property in the family. If your property includes something you want to keep in your birth family, whether it be a family heirloom, a share in a family business or special collectibles you wish to keep in the family, you and your fiancée can agree that it will remain in your family, and you can specify those items in your prenuptial agreement. This may also include property that you expect to receive in a future inheritance. The purpose of such provisions in your prenuptial agreement is to avoid challenges to your estate plans by your spouse. However, if you wish to use your prenuptial agreement to keep property in your birth family in this manner, it is vital that you also follow up by executing the necessary estate planning documents (i.e., a will, living trust, etc.) that will actually affect the transfers that you have agreed to in the prenuptial agreement.

Make specific financial provision for children from prior marriages or relationships. A prenuptial agreement is quite helpful (some would say indispensable) if either of you has children from another relationship or marriage and you want to make sure that your children inherit their share of your property. In a prenuptial agreement, one or both spouses may waive or give up the right to claim a share of the other's property at death, usually in exchange for some alternative share of property.

Agree on individual responsibilities during the marriage. In addition to the purposes listed above, there are many other possible uses for a prenuptial agreement. Examples of other issues sometimes addressed in prenuptial agreements include:

• whether to file joint or separate income tax returns or to allocate income and tax deductions to separate tax returns
• who will manage household expenses and who will be responsible for such expenses
• whether or not to have joint bank accounts and, if so, how you will manage them, how each person will contribute to them and, how they will be divided in the event of a divorce
• agreements about specific purchases or projects, such as buying a house together, starting up a business or paying for educational expenses for either party to the marriage
• how to handle credit cards and credit card charges. For example, whether you will each use different cards for different types of purchases, what kinds of records you will keep, how you will make payments and how credit card debt will be handled in the event of a divorce.
• agreements to set specific amounts or percentages of income aside for savings
• whether you will provide for a surviving spouse in your estate plan or with life insurance coverage.
• Choice of law governing the agreement which deters, to some extent, “forum shopping” by one partner in order to gain more favorable treatment. Please note, however, that many countries (Thailand included) will not apply foreign law to a divorce case before them although they will enforce a properly recorded prenuptial agreement at least as it applies to property within their jurisdiction.
• Agree how to settle any future disagreements. For example, you might agree to hire either a mediator or a private arbitrator rather than litigating issues in dispute between you in the event of a divorce.

What You Cannot Do With a Prenuptial Agreement

There are some things that you just cannot, or should not, attempt to do with a prenuptial agreement. Laws differ as to what issues are considered off limits. However, as a general rule, any agreement to do something that is illegal or against public policy will be considered unenforceable, and may even jeopardize other valid aspects of the prenuptial agreement. The following are examples of things that you usually cannot do:

Restrict or determine in advance issues relating child support, custody, or visitation rights. No state will honor agreements limiting or giving up future child support. The same holds true of agreements limiting future custody and visitation rights. This is because state lawmakers consider the welfare of children to be a matter of public policy and do not enforce any private agreements that would impair a child's right to be supported or to have a relationship with a parent in the future. Judges reserve the right to make individualized determinations as to what is in the best interest of children before the Court, at the time the divorce occurs.

"Encourage" divorce. At one time, many courts viewed any prenuptial agreements specifying how things would be divided up in case the couple splits as void and unenforceable because it “promoted divorce”. This view of prenuptial agreements has now been abandoned in every State in the U.S. and most countries that allow prenuptial agreements. While the modern day approach allows such agreements, many judges still take a hard look at them and will, in some cases, seek to find ways to ignore or amend provisions that they personally find too onerous.

Make rules about personal issues or matters which a Court may find to be frivolous. For practical reasons, you should keep personal agreements out of your prenup. Following are examples of nonfinancial matters that sometimes find their way into prenups, but are better dealt with separately, if at all. Of course, the possible issues of this sort are endless. Nonetheless, they don’t belong in a prenuptial agreement.

• responsibility for household chores -- from laundry to cleaning to car care
• dictating frequency of sexual relations
• dictating how many nights a week someone may go out without their spouse
• where the couple will spend their holidays and vacations
• use of last names after you marry
• agreements about having and raising children, such as birth control, having children, children's names, child care responsibilities, and education
• how you will relate to in-laws or stepchildren, and
• whether you will have any pets and who will be responsible for them.

These kinds of non-monetary agreements aren't binding in court, and in fact they could cause a judge to take your entire prenup less seriously. Rather than including personal matters in your prenup, you may find it helpful to simply make a list of your most important concerns and discuss them together. If you want to take it a step further, you can underscore your commitment by writing down your personal agreements in a separate document -- perhaps in a letter that each of you writes to the other, clarifying your intentions and wishes. This may help avoid misunderstandings and keep expectations clear but, a Judge isn’t going to enforce them for you.