The Portland, Oregon divorce and family law attorneys at Gearing, Rackner & McGrath, LLP, put together a guide discussing some of the most important information soon-to-be couples should know about how Oregon courts handle prenuptial agreements.
In Oregon, a prenuptial agreement is a type of contract that clarifies what will happen with a married couple’s assets in the event of one spouse’s death or a divorce or legal separation. Prenuptial agreements are created before the marriage, and take effect as soon as the couple gets married.
Advantages of a Prenuptial Agreement:
Prenuptial agreements can provide couples with numerous benefits. For example, by creating a prenuptial agreement a couple gains a sense of stability and security in knowing that sensitive issues have been addressed and will not interfere with the future of the relationship. Additionally, prenuptial agreements can be used to protect one spouse from the debts of the other. Finally, couples may decide to use a prenuptial agreement to clarify issues related to a child’s inheritance, which would otherwise be determined by a judge.
What Can a Prenuptial Agreement Cover?
Prenuptial agreements can cover a wide range of issues that may come up in the event of death, divorce or legal separation. However, there are also some issues that cannot be included in a prenuptial agreement. Below are the types of issues that can be included in a prenuptial agreement:
• Division of separate, gifted or marital property;
• Each spouse’s ability to buy, sell, or take a loan out on marital property;
• Whether either spouse has a right to the other’s inheritance;
• Whether spousal support will be awarded in the event of a divorce;
• How marital debt will be divided; and
• Ownership and management of a couple’s business interests.
Ensuring a Prenuptial Agreement Is Binding
A prenuptial agreement only has its intended benefits if it is legally enforceable or binding. For example, the agreement must be signed by both parties and cannot include any terms that are “unconscionable.” Unconscionable is a legal term used to describe an agreement that is one-sided and extremely unfair to the other spouse. Additionally, the agreement will not be valid if one of the spouses was tricked into the signing the document.
Couples considering a prenuptial agreement can take the following steps to ensure that the agreement is binding:
Disclosure: It is essential that each party fully discloses all of their assets to their spouse. A failure to disclose assets may be ground to invalidate an otherwise binding prenuptial agreement.
Counsel: Both spouses should have their own attorney review the agreement before signing it. This not only ensures that each spouse knows what they are signing, but also increases the likelihood that a court will uphold the agreement.
Review: The importance of closely reading a prenuptial agreement cannot be overstated. Both spouses should ensure that the other spouse read and understands the document before signing.
Reasonableness: Including unreasonable or unfair terms in a prenuptial agreement jeopardizes the validity of the entire agreement. Courts review prenuptial agreements closely, so it is essential that these agreements are not one-sided or favor one spouse to the detriment of the other.
What Is Unconscionability?
Unconscionability is a legal term used throughout contract law used to describe an agreement that is one-sided or extremely unfair to one party while favoring the other. Regardless of the terms of an agreement, courts will review a prenuptial agreement to ensure that it is not unconscionable. A court may find a premarital agreement unconscionable if all of the following apply
• One spouse failed to disclose assets to the other spouse;
• The spouse challenging the agreement did not waive the right to know their spouse’s financial situation; and
• The aggrieved spouse did not have actual knowledge of their spouse’s financial situation or any way to ascertain such knowledge on their own.
Prenuptial agreements can provide a solid foundation for a new marriage; however, to be legally enforceable they must be thoughtfully created. The Oregon family law attorneys at Gearing, Rackner & McGrath, LLP, can guide you through the process, explaining all relevant laws and help you ensure that your interests remain protected.
For details visit: https://grmfamilylaw.com/services/prenuptial-agreements/
Gearing Rackner & McGrath
121 SW Morrison St #750
Portland, OR 97204
(503) 222-9116