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Most prospective newlyweds who are asked about prenuptial contracts—also known as “prenups” or “premarital agreements”—tend to retract from the idea. The unfortunate misconceptions regarding premarital agreements are challenging to overcome. Most couples either dismiss the notion of a prenup, reasoning that a prenup would create conflict between them, or that the pair doesn’t have enough assets between them to warrant a premarital agreement.
While the awkwardness of bringing up a prenup before your wedding day is understanding, it may not be a good enough reason to completely dismiss the potential benefits of a premarital agreement. This blog examines Iowa law on premarital agreements, as well as the advantages and disadvantages of signing such an agreement.
Iowa Law on Premarital Agreements
Under Iowa Code § 596.1, “premarital agreement” is defined to mean “an agreement between prospective spouses made in contemplation of marriage and to be effective upon marriage.” Iowa statutory law does not require many formalities to form a valid premarital agreement.
Under Iowa Code § 596.4, a premarital agreement merely needs to be in writing and signed by both prospective spouses. Unlike other contracts, a premarital agreement is enforceable without what is known as “consideration.” In contract law, consideration is something of value that the parties exchange to form a valid contract. For example, goods and services are typically exchanged for money or a promise to pay money in the future. However, when it comes to premarital agreements, the parties’ marriage acts as the “consideration” to support the contract.
Disadvantages of Premarital Agreements
Premarital agreements dampen romance: Hiring attorneys to discuss how the parties will divide assets in the event their marriage ends in divorce or death is a great image for the beginning of a new marriage. As a result, finding the “right time” to bring up a prenup can be difficult. However, given the delicate nature of the subject matter, it is crucial for couples to exercise tact when discussing a prenup. For example, bringing up the idea of creating a premarital agreement would not play well after a major argument, as this could create significant insecurity for the parties when it comes to their ability to resolve marital disputes successfully.
Reciprocity in terms: Premarital agreements cover many issues, including the disposition of marital property upon divorce, issues relating to spousal and child support after divorce, and inheritance rights. If one prospective spouse has already gone through a divorce, they may have a better idea about the process. A party who enters into a prenuptial contract under the mindset that they will never get a divorce might unwittingly sign an agreement that disparately favors the other spouse’s interests. To avoid this, both prospective spouses should have their own independent counsel review the terms of a premarital contract to so each party has a sufficient understanding of its legal effect.
A premarital agreement may not be necessary: Although a prenuptial agreement has many advantages, it might be redundant depending on the couple’s specific goals. For instance, if your primary concern in a divorce is making sure your right to child support is preserved, a premarital agreement may be unnecessary. Under Iowa law, provisions of a prenuptial agreement that adversely impact a party’s right to child support violate public policy. Iowa Code § 596.5 specifically prohibits premarital agreement provisions that violate public policy.
Benefits of a Premarital Agreement
Promoting and enhancing communication: The number one advantage regarding premarital agreements is that it serves as an opportunity for the couple to plan and organize their future. The importance of communication in a marriage cannot be understated. Thus, when couples begin the process of crafting a premarital agreement, they get a chance to discuss important issues that will impact their marriage.
Avoid future litigation costs: Courts will defer to the provisions of a valid premarital agreement in the event of a divorce. As a result, the parties can save time and money by developing a roadmap for how specific issues should play out in the event of a divorce, minimizing the need for the parties to argue about it in the future.
Protection of specific property: A premarital agreement allows the parties to contract out of Iowa’s system for dividing property. For example, if the parties believe that marital assets should be equally divided, then the parties can specify the use of an approach of property division closer to California’s community property system. Furthermore, Iowa law allows the parties to agree as to what jurisdiction’s laws govern the interpretation of contract terms. Thus, a premarital agreement based on California’s community property system may specify that the law of California will govern a court’s interpretation of the premarital agreement.
Simplifies issues arising from previous relationships: A premarital agreement is particularly useful for issues that arise from previous marriages or relationships. For example, a person’s duty to pay child support does not extend to stepchildren. However, a prospective spouse might agree to pay to child support for a stepchild in the event the parties get divorced.
Call Hope Law Firm for Quality Legal Counsel
If you are considering entering into a premarital agreement, it is in your best interests to consult the legal advice of an experienced attorney. At Hope Law Firm, our legal team has dedicated much of their legal practice to advancing the interests of families in domestic relations and divorce cases. You can benefit from our compassionate approach to legal advocacy as we are committed to treating you and your experiences with the utmost respect and discretion.
To schedule a consultation about your case, call us at (515) 305-2772 or contact us online today.