By Attorney Suzanne R. Sayward (July 2012)

Planning a wedding is an exciting time for couples, but it’s important to remember that a wedding is not just about flowers, cake and champagne. The wedding ceremony is the public declaration of the couple’s change in their legal status from single to married. Once that happens, the law confers certain property rights and financial obligations on spouses. If a marriage ends in divorce, the Court has broad discretion to determine how a couple’s assets will be divided between them. Couples who would prefer to decide for themselves how their assets will be divided in the event they terminate their marriage should enter into a prenuptial agreement.

Here are five facts to know about prenuptial agreements.

1. Prenuptial Agreements are enforceable in Massachusetts provided they meet certain requirements. In general, these requirements are:

a. Both parties must enter into the agreement voluntarily. This means that there must be no coercion or duress and one party may not take advantage of the other party’s known weaknesses.

b. There must not be any fraud or misrepresentation.

c. The agreement must be fair and reasonable both at the time it is executed and at the time enforcement is sought.

d. There must be full and fair disclosure of all assets and liabilities.

Under Massachusetts law it is hard to prove that these requirements were satisfied unless both parties have separate legal counsel advising them. That is why it is important that each person have his or her own attorney.

2. A prenuptial agreement will not protect your assets from your spouse’s long-term care costs. It is very common for people marrying for the second time to enter into a prenuptial agreement. These are folks who have acquired significant assets over the years and may have children from a prior marriage. In addition to preserving their personal estates for their respective children, they are also concerned about protecting assets in the event one of them needs long-term nursing home care. They are often surprised to learn that even though their prenuptial agreement states that neither will be responsible for the long-term care costs of the other, that provision will be disregarded if one spouse needs to apply for Medicaid benefits to pay for long-term nursing home care. As far as Medicaid is concerned, the assets of the healthy spouse will be considered countable and available to the nursing home spouse for Medicaid eligibility purposes.

3. You don’t need to be rich to need a prenuptial agreement. Even if the prospective bride and groom are just starting out and do not have much money, a prenuptial agreement may still be appropriate where the parents or grandparents of either of them have wealth that may someday be inherited by the younger generation or where there is a family business. This is especially important in Massachusetts where assets acquired during the marriage, even inherited assets, are considered marital assets subject to division in a divorce unless there is a valid prenuptial agreement in place that provides otherwise.

4. There are some things that cannot be decided in a prenuptial agreement. A couple cannot use a prenuptial agreement to determine rights and obligations with respect to their children, including child support, visitation and custody.

5. It may not be too late even if you’re already married. In general, a contract is enforceable only if there is consideration. That is, each party must “get something” for entering into the contract. For prenuptial agreements, the upcoming marriage is the consideration that makes the agreement enforceable. Post-marital agreements (agreements entered into by people who are already married) have often been viewed as unenforceable because of a lack of consideration. The parties are already married so what is the incentive to sign an agreement? In 2010, the Massachusetts Supreme Judicial Court ruled in a case of first impression that post-marital agreements are valid and enforceable in Massachusetts provided they meet the same requirements as prenuptial agreements.

Entering into a prenuptial agreement may not be the most fun and exciting part of getting married, but for many couples it is an important component to the legal formalities of marriage. For the statistically large proportion of couples whose marriage will end in divorce, a prenuptial agreement offers important protection to them and their families, and can often make the divorce process less difficult.

Attorney Suzanne R. Sayward is an estate planning and elder law attorney and a partner with the Dedham law firm of Samuel, Sayward & Baler LLC. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information about estate tax planning, visit www.ssbllc.com or call (781) 461-1020.