Most of us have heard of pre-nuptial agreements. It is a myth that pre-nuptial agreements are only for the extremely wealthy and famous individuals. As I have noted in my previous writings, pre-nuptial agreements are extremely useful tools for individuals who want to protect assets that they are bringing to the marriage, are remarrying or have children from a previous marriage/relationship and want to ensure that their children are provided for in the future.
In order to be truly effective, a pre-nuptial agreement must be specifically tailored to each couple’s specific situation.
Some people choose to put a provision known as a “sunset clause” in their pre-nuptial agreement. A sunset clause provides that a pre-nuptial agreement will expire on or after a certain date.
The question then is, “is a sunset clause in a pre-nuptial agreement a good idea?”
Most experts agree that a sunset clause should be avoided. Here’s why:
- A Contract is in place in case something goes wrong: Why then would you want remove a provision that would protect you?
- A sunset clause can promote divorce at a later time: This is definitely a possibility. A person my choose to file for divorce after the pre-nuptial agreement expires. This is especially possible if your pre-nuptial agreement expires after a relatively short time (i.e., 10 years).
- What about a sunset clause that kicks in upon the birth of a child? Having a child does not necessarily prevent a divorce from occurring in the future. (At least have of my divorce cases involve children, so I don’t think children can be considered a deterrent). Additionally, it is important to keep in mind that pre-nuptial provisions regarding child support and/or child custody are generally not enforceable in most states.
- A “tested” marriage fails: Enough said.
- State laws may still apply: Just because a pre-nuptial agreement expires, it does not mean that your state’s divorce laws will not apply. In fact, if you pre-nuptial agreement does expire, it is almost certain that your particular jurisdiction’s laws will apply to your divorce proceedings.
- What about phased out sunset clauses: This means that once certain milestone is reached in a marriage, certain provisions in a pre-nuptial agreement will no longer apply. For instance, you might be entitled to a certain amount of spousal support if you divorce after 5 years of marriage.
You may be then wondering if there are any benefits to sunset clauses. A sunset clause can give a couple the opportunity to see if their marriage will work out. It is important to remember that you always run the risk of your marriage after the pre-nuptial agreement expires. However, it is important to remember that the expiration of a sunset clause may be beneficial to the party with less economic resources.
If you want a sunset clause in your pre-nuptial agreement, the right kind of sunset clause depends on each party’s assets and debts and their motivation for requesting a pre-nuptial agreement.
Are you considering a pre-nuptial or post-nuptial agreement? Contact The Shah Law Firm for your free, initial 30 minute consultation!
