If you are getting married and drafting a premarital agreement, you are required to fully disclose any assets, income, and debt. This information is extremely important if the marriage ends and you file for a divorce. If one part of the marriage has more of an economic advantage prior to the marriage, then this information will be extremely helpful in determining the divorce arrangements.
Our firm cautions that one party who is either economically disadvantaged or who waived rights in the agreement may try to contest and challenge it. When this happens, favor is usually found with the other person in the party and the document if they state that the other party was fully aware of the contents in the agreement prior to signing. This is especially true if both parties had full knowledge of assets. If any assets are hidden and then discovered in court, it makes it easier to question the validity of the agreement. One way to prove both parties were fully aware of each other’s assets is to establish that the parties lived together for a period of time before the agreement was executed. Simply put, if you fully disclose everything, it is harder to claim that the agreement is fraudulent.
Prior to signing any agreement, all assets, income and debt should be fully disclosed. There are many methods to accomplish this; one way is to provide tax returns for the previous three years. Also, a list of specific assets should be created. This list should include the following:
- Description of the asset;
- Value of the asset; and
- Any remaining debt on the asset.
This list should include mortgages such as car loans, housing purchases and loans from 401(k) plans, among others.
This list isn’t limited to items of financial wealth. Assets with emotional value, like jewelry from a grandparent or other family heirlooms, should also be listed.