What Can or Should I Include in My Prenuptial Agreement?

The contents of your prenuptial agreement should be catered to you and your spouse’s personal financial and family circumstances. First and foremost, many couples choose to address the division of assets and property in the event of divorce. Start by identifying issues and assets that are important to you and any concerns you may have that you’d like clarified prior to marriage.

Once you have a list of assets and matters you’d like to address, you should have a good idea of what terms to include in your personal agreement. While most prenuptial agreements focus on property and assets, you may also wish to address issues such as financial support of children including child support, payments toward education, weddings, etc.

Maybe you’d like to ensure that both parties maintain life insurance designating the other as beneficiary of the policy. Or, with the ever-increasing cost of college education, maybe you and your spouse want to agree on how to treat your respective student loan debts during the marriage and in the event of divorce. 

Some couples even choose to include details about care for aging parents including whether they will contribute financially to an elderly parent’s care and whether they plan to care for an elderly parent in their marital home. In addition to the traditional asset protection, all of these issues and more are prime topics to consider including in your prenuptial agreement.

My Spouse and I Have Decided To Do a Prenup, What Now?

If you and your spouse have decided to enter a prenuptial agreement, you should do two things:

First, each of you should visit an attorney to ensure that your agreement is legally enforceable and is effective in addressing your respective concerns. If cost is a concern, it’s recommended that one spouse’s attorney draft the prenuptial agreement and the other spouse seek independent legal counsel to review the agreement and advise that individual independently. Under Montana law, prenuptial agreements must meet specific legal requirements, so obtaining a legal review and advice is paramount to ensuring your agreement meets these legal standards and adequately protects your rights. Many Montana attorneys offer limited scope legal services and can quickly review your agreement for a relatively low cost. 

Second, execute your prenuptial agreement at least a couple of weeks prior to your wedding. Realistically this means you should begin your discussions regarding your agreement well in advance of your wedding. How far in advance will likely depend on how much property or assets each of you are bringing to the marriage and whether you have any additional concerns that may add to the complexity of your agreement. Rushing in to an agreement right before the wedding can cause oversight on important details and may affect the enforceability of the contract.

When is the Best Time to Enter a Prenuptial Agreement?

Don’t wait until the last minute! To be enforceable, pre-nuptial agreements must be voluntary.  Because of this voluntariness requirement, it is almost always a bad idea to save the prenup until the last minute, unless both spouses have had time to consider the terms and obtain legal advice where necessary. If it appears that one party signed the agreement under duress, there’s a good chance a court will refuse to enforce it down the road. For example, if right before a couple walks down the aisle, the wife-to-be says to her husband-to-be, “sign the prenup, or I won’t marry you,” a court would likely refuse to enforce the agreement in the event of divorce, because the husband’s agreement to sign was not truly voluntary considering the circumstances.

Should I Consider Entering a Prenuptial Agreement? Why?

You might consider a prenuptial agreement if either you or your spouse: own real estate or other property prior to the marriage, have or expect a substantial inheritance, have children or spouses from a prior marriage or relationship, wish to clarify expectations regarding financial support to children or financial support and physical care of elderly parents or family members, have debts that you want to address, and many more reasons. We suggest reaching out to us and scheduling a consultation to decide whether a prenuptial is right for you and your future spouse.

What is a Prenuptial Agreement?

A prenuptial agreement is a written contract, between future spouses that becomes effective upon marriage and must be signed by both parties. A prenuptial agreement allows a couple to maintain control of and decide how their property and assets will be distributed in the event of divorce. Couples may also address matters in their agreements that do not necessarily relate to property distribution upon divorce.

Buying Gifts for Your Ex

Christmas, a magical time for all ages, can also be an incredibly difficult one after divorce has changed the face of your usual family traditions. Rather than dwell on the hurt between you and your ex, do your best to remember that this is a time for your kids. If your children need help buying a gift for your ex, do so gladly. You will create memories with your children, prove to them how much you care about their relationship with both parents, and Christmas will remain a special time for the entire family.

If your ex doesn’t reciprocate, don’t worry – you’ve already got what you wanted.  Children who love both their parents, for whom Christmas is still a magical time.

Intellectual Property

Economic and cultural progress in America has long been driven by creation of intellectual property (“IP”) and protecting the creators’ rights. Fundamentally, rights to IP is the idea that you have the right to the creations of your own mind. In fact, this is promised to all American citizens in the 1st Article of the U.S. Constitution, which states “the progress of science and useful arts” is ensured “by securing for limited times to authors and inventors the exclusive right to their respective writing and discoveries.” This takes shape in the form of patents, copyright, trademarks, and trade secrets. Each is designed to protect a slightly different facet of intellectual property. Patents protect inventions, discoveries, or new processes developed by a person or organization. Copyright protects an original work, such as artwork or a novel, for the author. Trademarks represent distinctive logos, symbols, or phrases, which are used to distinguish between separate entities or products. Lastly, trade secrets protect confidential information about a particular process, method, or design.

The Right to Privacy vs. the Right to Know

In Montana, an individual’s right to privacy is balanced carefully with the public’s right to know. The Montana constitution promises to protect the right of every citizen to “examine documents,” meaning the government, as a default, should not hide documents from the public (e.g. court document, meeting minutes, deeds, etc.). However, this right sometimes collides with an individual’s right to privacy. In a recent case, Krakauer vs. Montana, the state’s Supreme Court weighed this very issue and determined that practices like redacting private information from a document can be a way to resolve the friction. Protecting both citizen’s right to know and their right to privacy is critically important and yet still difficult to reconcile.

Online Privacy

A recent study from the Pew Research Center shows that 91% of Americans feel they’ve lost control of their personal information online (Raine, 2016). With so much of our lives online now days, everything from school to banking to social media, it is easy to see why so many feel this way. However, as last week’s explanation of the Fair Information Practices (FIP) shows, all Americans still have a significant amount of control over information that is collected about them online, if they choose to exercise their rights. Even tech giants such as Google and Facebook comply with the FIP regulations as well as other industry best practices, such as data protection or privacy policies, and international law, such as the EU’s General Data Protection Regulation (GDPR) or Canada’s Anti-Spam legislation (CASL). Protecting your data online can be as simple as adjusting the privacy setting on your accounts to specify what information, if any, you feel comfortable being collected.

Rainie, L. (2016, September 21). The state of privacy in post-Snowden America. Retrieved November 10, 2017, from http://www.pewresearch.org/fact-tank/2016/09/21/the-state-of-privacy-in-america/

Privacy Guidelines

The Federal Trade Commission’s Fair Information Practices (FIP) has been one of the most impactful documents for establishing privacy guidelines. It is built on five core principles.

  1. Notice: This means an organization must disclose their information practices to users in some way before collecting any data.

  2. Consent: This allows customers to choose how their data will be used. These first two, notice and consent, are core principles of FIP, and many of us encounter them on a daily basis. For example, every time you link an account or a new app to your Facebook profile, you are notified as to what information will be accessed on your profile and you must grant permission before you can continue.

  3. Access: This enables users to review or contest the accuracy of their information that has been collected.

  4. Security: This requires organizations collecting information to uphold security measures to ensure that customer information is safe and accurate.

  5. Enforcement: FIP includes some elements of enforcement to ensure legal remedies for violations of the fair information practices.

The information in this blog post was gathered from:  Laudon, K. C. (n.d.). Management Information Systems (15th ed., Vol. 2.0). Pearson. 2017.

The Right to Privacy

Many Americans hold a strong belief in their own right to privacy. However, what exactly constitutes privacy and what we are guaranteed under the law is not always so clear. Although the right to privacy is not explicitly mentioned in the Constitution, it has its origin the 1st Amendment, guaranteeing the right of free speech and association, and the 4th Amendment, our guarantee against unreasonable search and seizure. On the national level, the right to privacy is outlined by the Federal Trade Commission’s Fair Information Practices (originally published in 1973). These establish commonly accepted standards for privacy and the collection of information.

Montana residents are ensured even greater protection of their right to privacy than the average U.S. citizen. Montana is one of ten states that specifically address this right in their constitution. Montana recognizes that the protection of the right to privacy is essential for maintaining a free society. Next week, we’ll go into more detail about what elements of privacy are protected under the law.

Digital Assets in Estate Planning

For most of history, digital assets (ex: photos stored in the cloud, online accounts, etc.) did not exist. Their introduction changed a great deal about the way humans operate on a daily basis. Now, lawmakers have begun to address how digital assets affect estate planning. In 2017, the Montana Legislature adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). Before this act, it was difficult, if not impossible, for a fiduciary or personal representative to access the digital assets of someone who had passed away. The default provisions of RUFADAA do not grant access to digital communications (i.e. emails) without specific consent. However, fiduciaries do automatically have access to other digital assets, unless expressly prohibited. Specific directions regarding digital assets or digital communications can be made in a will, trust, or power of attorney. It may be helpful for an individual who would like their digital assets accessed by their personal representative to keep a separate document listing important account numbers or usernames with their will.  

Contracts: Legality

The final element of a valid contract is legality. This means that if a contract requires one of the parties to perform an illegal action, it would be declared void. If Liz offers to pay Ben $300 to break into her neighbor’s house, then refuses to pay him after he does, Ben cannot sue Liz for breaching her contract. Similarly, if either party enters into a contract illegally, the contract is generally unenforceable. For example, this would apply if someone formed a contract with an unlicensed professional when the law requires someone in that profession to have a license.

Contracts: Capacity

Capacity is the forth element in establishing a legally binding contract. The mental ability, or capacity, to enter into a contract might seem like a straightforward requirement at first, but can actually be one of the more difficult elements to establish in certain situations. Certain classifications of people, such as minors, mentally incapacitated, and sometimes even intoxicated persons, may inherently lack the capacity to contract. Minors, unless they are emancipated, are given the legal authority in most states to disaffirm, or void, any contract they enter into. Mental incapacity can be a little harder to determine. However, if any person, suffering from a mental disorder or not, enters into a contract understanding both the nature and obligations of the contract, they will be bound by the contract. In a similar way, if an intoxicated person merely exercises poor judgment due to their intoxication, but understands the contract, they will still be bound.

Contracts: Consideration

Consideration is another very important aspect of a contract. Consideration can be thought of as what each party will receive from the contract. In the example from last week, Liz sold her car to Ben. Once Ben made the offer and Liz accepted, the money he promised to give her is his consideration and the car she promised to give him is her consideration. There are many different types of consideration. First, it can be something that benefits the promise, such as Ben gaining a car or Liz gaining money in the example above. Second, it can be a detriment to the promisor. This would be Liz giving up the car and Ben giving up the money. Third, it can be a promise to do something, like paying someone in advance if they promise to come mow your lawn next week. Fourth, it can be a promise to refrain from doing something. This can be as simple as making a deal with your friend to give up eating chocolate for a month in exchange for $20.

Although a contract must have consideration on both sides to be considered valid, a court will rarely, if ever, judge the fairness of the consideration. Therefore, if Ben only offered Liz $3 for her car, but Liz accepted the offer, the consideration requirement is still fulfilled. Even though $3 doesn’t necessarily seem like a fair exchange for a car, a contact would still be formed between the two.

Contracts: Acceptance

Accepting the offer is the next step in establishing a valid contract. Most importantly, the offeree must show intent to be bound by the contract upon acceptance. This can look different among different types of contracts. In unilateral contracts (a promise in exchange for an action), the contract is accepted once the offeree performs, or begins performance, on their side of the contract. For example, if Ben promises a $100 reward for the return of his lost cat, Liz accepts the contract when she returns the cat to Ben. If she were to call Ben and simply promise to find the lost cat, no contract would be formed because Liz did not complete the action Ben requested. Liz would have to find Ben’s cat and return it before a contract is formed between them. Bilateral contracts, on the other hand, can be thought of as a promise in exchange for a promise. If, for example, Liz decided to sell her car to Ben, Ben then makes an offer and Liz accepts the offer, a contract is formed before money, or the car, is ever exchanged.

If the offerer makes an offer, but the offeree makes a counteroffer instead of accepting, the original offer is terminated. Then the original offerer may decide whether to accept the new offer, make a new counteroffer, or reject the offer altogether. In effect, a counteroffer starts the entire process over.

Contracts: Offer

The offer is the first step in establishing a contract between two parties. This stage outlines the actual terms of the contract. The party making the offer generally must have present intent to enter into the contract. This means that if a reasonable person understands the offer to be a joke, the contract can’t be valid. However, if the offering party claims that the offer was only a joke, but a reasonable person does not understand it to be a joke, the offer can still be considered valid. This is known as the reasonable person standard and is a common theme throughout contract law.

Once an offer has been made, it does not remain valid forever. In many situations, the party making the offer has the right to revoke the offer after some amount of time has elapsed. Whether this is specified by time-limitation language in the offer or is simply permissible before the other party has accepted the offer relies heavily on the circumstances surrounding the contract.

An Introduction to Contracts

Whether or not we realize it, contracts are a daily reality in all of our lives. They are present in actions as common as purchasing food at the grocery store to major life events such as signing the lease on a new house. Contracts can come in many forms, written or oral, express or implied. Despite how frequently we all engage in contracts, determining what makes a contract legal can seem tricky. At the most basic level, a contract must exhibit five essential characteristics to be considered valid: offer, acceptance, consideration, capacity, and legality. Over the next five weeks, we will explore each of these characteristics and how they relate to the contracts in your life.

Why Mediation?

Ultimately, we find that mediation is an excellent fit for those who would like to retain control over the final decisions in their divorce and, with the help of a mediator, are able to work with their spouse to compromise and reach agreements that are acceptable to both. The neutral party is able to facilitate and guide you through the process and draft your final documents.

At the end of the day, the mediation process helps to preserve a workable relationship between the two parties. There can’t be enough good said about this, particularly for those couples who still have children at home and will need to continue communicating in the future. It is a process that addresses not only the legal and financial aspects of your case, but also the emotional ones; it is designed to keep everyone working with, rather than against, one another. The fact is divorce is hard – there’s no reason to make it harder.