The Role of Contracts in Divorce
Marital contracts like premarital agreements play an important role in divorce because they outline the division of assets agreed upon by both spouses prior to marriage.
Understanding Premarital Contracts
In anticipation of marriage, some couples choose to enter into marital contracts. In Indiana, such contracts are called premarital agreements. They determine how assets will be divided in the event of a divorce. Typically, premarital agreements identify property that each spouse is bringing into the marriage, and outline how money and property acquired during the marriage will be classified (separate property of each spouse or joint property). In some cases, premarital agreements can outline the rights and responsibilities of each spouse during the marriage.
Premarital agreements can address a variety of issues including:
- Rights and obligations of each party regarding separate and marital property
- Rights to control or manage property
- Provisions established in a will, trust, or another arrangement
- Modification or elimination of spousal support
- Ownership rights for death benefits from a life insurance policy
Spouses who elect to enter into a premarital agreement should disclose their assets prior to marriage, so each party has sufficient time to review the agreement with a divorce lawyer or other counsel of choice. Marital contracts and premarital agreements are not taken lightly in a court of law. In most cases, a judge will enforce the contract and divide assets as specified in the premarital agreement.
Premarital agreements are legal contracts that are favored by Indiana law. The law defines a premarital agreement as “a contract executed in contemplation of marriage which becomes effective upon the date of the marriage.” Such contracts can be used to settle property rights during a marriage, a divorce, and after the death of a spouse. Typically, premarital agreements contain full disclosure of all assets from each party, and they are drawn up and signed by both parties well in advance of a wedding date.
Under Indiana laws, a premarital agreement is unenforceable if a spouse can show proof that he or she did not voluntarily execute the agreement, or the agreement was unreasonable when it was executed. If there is a provision in the agreement to modify or eliminate spousal support that results in extreme hardship, the court may require payment for spousal support due to unforeseen circumstances when the agreement was executed. When premarital agreements are disputed in a divorce, Indiana divorce lawyers can help with enforcing or defending against the enforcement of a premarital agreement.