Prenuptial agreements are contracts entered into by couples planning to marry. In New Mexico, a prenup must be voluntary and premised upon full disclosure by both parties. Agreements that are entered into as a result of coercion or duress are void and unenforceable. In addition, if a party fails to disclose assets or property to the other spouse while negotiating the prenup, the contract is void as a matter of law.
Prenuptial agreements are common between couples who are choosing to keep their assets, property and debts separate upon marriage. Under typical circumstances, all property obtained and debt incurred during a marriage become community property and debt, which must be equitably divided by the court upon dissolution of marriage.
Under a prenup, couples generally agree to keep all property acquired during the marriage separate so that, in the event of a divorce, neither spouse will be forced to relinquish 50% of his or her property. Similarly, a prenup may provide that the parties keep all debts incurred during marriage separate, so that upon dissolution each party is only responsible for payments that he or she individually incurred, not 50% of all the debts incurred by both parties during the marriage. Keep in mind that this agreement may not be enforceable against creditors though enforceable between the parties.
Prenuptial agreements can be a good way to protect assets, but they come with drawbacks as well. Many times, a fiancÃ©e is surprised or taken aback at the notion of signing a prenup. Some feel that these agreements are in contemplation of divorce before the wedding even takes place. While these are valid concerns, such agreements are very common in today’s society and should simply be seen as legal protection to prevent against the equal division of assets upon divorce required by New Mexico’s community property laws.
A prenuptial agreement is as unique and individual as the couple entering into the agreement. The parties are free to agree upon any terms they see fit and appropriate for their new life together as long as none of those terms violate any laws. Not all property must be kept separate and parties can agree to retain only some of their assets while regarding others as marital property subject to equitable division. All terms in the prenup are negotiable.
There are no absolute rules as to exactly how the agreement must be formatted. As long as both parties are comfortable with the terms and full disclosure rules are met, the agreement will be valid and enforceable.