Navigating Prenuptial Agreements for Second Marriages with Complex Assets

Planning a second marriage involves new and different “baggage” than the first one, and not just the emotional kind. A divorced or widowed person is more likely to have a complicated financial life. They may have children from their first marriage or act as family caretakers for other relatives. While unmarried, they may have advanced in their career and gained more wealth or investments than when they first married. But if they were unlucky, they may have gained debts and obligations that both partners need to face.

Protecting your assets and your family’s future can be as simple as pre-wedding preparation—an agreement between you and your new spouse. Prenuptial agreements have a bad reputation as tools of the wealthy or selfish, but this is a myth. You don’t need to be rich to make one—although you certainly should if you are!—and the agreement can protect both parties. Financial honesty and clarity are parts of the firm foundation that every marriage needs.

Prenuptial Agreements in Kentucky

Surprisingly, Kentucky contract law did not honor prenuptial agreements until the 1990s. Before that time, the courts believed that they would encourage divorce. However, a series of Kentucky Supreme Court cases, beginning with Edwardson v. Edwardson (Ky. 1990), established the state’s legal requirements for prenuptial agreements.

To be valid in Kentucky, a prenuptial agreement has to be:

• In writing, signed by both partners
• Accompanied by full financial disclosures
• Signed when both parties were competent to do so (not when intoxicated or while suffering from mental illness or injury)

The court will also require the agreement to be:

• Not unconscionable—that is, not so unfair that it shocks the court’s conscience 
• Not impossible or impracticable under the couple’s current financial circumstances 
• Undertaken of both partners’ free will and not due to fraud, mistake, or duress 

“Duress” can mean physical coercion or threats of harm, but it can also mean effectively being forced to sign the agreement. Was it presented on the wedding day? Did the partner have a chance to consult an attorney or their family members? Courts will take these factors into consideration. However, no one can claim duress if their partner simply refused to get married without the agreement.

A prenuptial agreement can determine:

• Whether or not a partner will pay spousal support and how much
• Disposition of any property owned jointly or separately

However, a Kentucky court will not be bound by any provisions about child custody, support, or visitation. See Ky. Rev. Stat. § 403.180. Since the children were not competent to be part of such an agreement—and may not even have existed then—it cannot bind them. A prenuptial agreement also cannot require actions that are currently against the law.

If you intend to live in another state after your marriage, you may also need to consider prenuptial agreement law for that state. 

What to Consider in Your Prenuptial Agreement

As you enter into your second marriage, you will want to protect not only your personal future interests but those of:

• Any children you have from previous relationships
• Other family members you may care for (such as aging parents or special needs relatives)
• Your business, if you are an entrepreneur or maintain a broad portfolio

Kentucky courts follow the principle of “equitable division” of marital property following a divorce. Depending on the circumstances, this can end in a larger share of the property going to the partner who worked less. A prenuptial or postnuptial agreement can avoid this outcome.

Financial Disclosures

For complex assets, you will need a careful valuation in your financial disclosure. Attorneys and financial experts know how to determine the correct valuation for a business, a rental property, or other assets with long-term value that may fluctuate. Without an appropriate valuation, you stand to lose in the event of a divorce.

Business Interests

Reaching a fair valuation for any businesses you hold and arranging for their division after a divorce is essential. This may be an especially sensitive matter if your partner is also involved in the business. Nonetheless, it is much better to settle the issue before any type of marital discord occurs.

Individual Concerns

Just as with an estate plan, you can protect assets for your loved ones in order to safeguard:

• The care and education of minor children
• Higher education for adult children
• Funding for any dependent special-needs children or adult relatives
• The possession and welfare of domestic animals or livestock

It is also wise to create a list of heirlooms or sentimental items in your family’s possession so that you can specify what would happen to them in the event of divorce or incapacity. After bitter divorces or unexpected deaths, ex-spouses or stepparents have been known to claim such things—even family photos—purely to get rid of them.

Reach Out for Help

No one really likes to have these conversations; that’s why you want to work with a family law attorney who does it every day. Our Kentucky and Ohio attorneys can help you examine your joint finances and strengthen your peace of mind before you marry. Contact our Covington office (just over the river from Cincinnati) at 859-414-0543 for a free case evaluation.