Question: Under what circumstances should a couple getting married do a prenuptial agreement?

Answer: Hawaii law recognizes prenuptial agreements. A prenuptial agreement is basically an agreement by the parties as to how the couple’s assets and debts would be divided in the event of a divorce. Any couple getting married should consider entering into a prenuptial agreement if they want to minimize, and hopefully eliminate, any disputes regarding the division of their property and debts in the event of a divorce. A prenup should be seriously considered if either or both of them own significant assets at the time of marriage or have an expectation of receiving significant family inheritances or gifts from family members after their marriage.

Q: Are you sending a negative message to your would-be spouse if you ask for a prenup?

A: There is always the possibility of one party interpreting a request to consider a prenup in a negative manner. However, any negative connotations of a prenup can be minimized, if not avoided, by discussing it when the relationship gets serious and also approaching it as a way to address and clarify any financial issues or concerns either party may have. 

Q: Does a prenup cover both assets and liabilities, such as credit card debt or student loans incurred before marriage?

A: A prenuptial agreement is a contract between two people who intend to enter into a marriage and may address the disposition of both assets and debts that are owned by each party at the time of marriage as well as property which may be acquired during the marriage by either of them.

Q: If someone has money or property coming into a marriage, what is the Hawaii law regarding division of those assets if a couple gets a divorce?

A: Hawaii divorce law (Hawaii Revised Statutes 580-47[a]) authorizes the Family Court judge to divide the assets of the marital estate according to what is “just and equitable,” and gives the Family Court judge wide discretion in arriving at that decision based upon the specific facts of that marriage. Our Hawaii Supreme Court and Intermediate Court of Appeals have provided the Family Court judges with many decisions to assist them in applying the statue. The process is complex, fact-intensive and requires the court to apply the appropriate law to the facts of that particular case and attain a just result. However, if the Family Court finds that there is a valid prenup signed by the parties, then it will follow the terms contained in that prenup.

Q: Is it a bad idea to commingle assets after marriage or add a spouse to the title of a house that one spouse previously owned?

A: When considering a prenup, two of the many things a couple should discuss is whether they want to keep separate accounts or commingle their income in joint accounts, or to add one of them to the title of separately owned real estate. The function of a prenup is to address those types of financial issues.

Q: If a couple is getting married, what is your view about one of the spouses not willing to disclose the full extent of his or her financial situation?

A: One of the basic requirements for a valid prenup in Hawaii is that there has to be a full disclosure of the assets and debts by each party to the other. If one party fails to make that full disclosure, then the prenup will be declared void upon review by a family court, so the reasons for any reluctance to make a full disclosure should be fully discussed.

Q: Can a spouse exclude the other in a prenup from receiving future inheritance, future retirement benefits or money earmarked to go to a child from a previous marriage?

A: A prenup that has been found to be valid and enforceable can exclude a spouse from sharing in any future assets of any nature that may be received, earned or inherited by the other party. This could also include terms which provide for the children of a party from a previous marriage. 

Q: Is there such a thing as an ironclad prenup, and under what circumstances can a prenup be undone during a divorce proceeding?

A: There are no guarantees in life, and that applies to prenuptial agreements, also. Each prenup is subject to review by the court in the event it is challenged. The Family Court will review a prenup under the same general criteria that it would review any other contract entered into between two parties in conjunction with the applicable law regarding prenups. It is a case-by-case review based upon the facts that existed at the time of the signing of the prenup and the applicable law. The prenup can be declared void and unenforceable by the Family Court as a result of that review.

Q: How much should a couple expect to pay to draw up a prenup, and is it an hourly rate or one flat fee?

A: The cost for a prenup can vary depending on many things, so it is recommended that anyone who is interested in having a prenup drafted call different attorneys to get estimates. In order for the attorney to give you an informed estimate, however, you should be prepared to give the attorney the date of your wedding; a description of your assets, debts and annual income; whether an interpreter may be needed; and some ideas of what you want the prenup to address.

Interviewed by Dave Segal.