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Understanding sunset clauses in prenups

On Behalf of | Mar 18, 2022 | Family Law |

You may have heard of one half of a famous couple filing for divorce just days before their prenuptial agreement “expired,” supposedly to make sure they got the amount of assets and/or spousal support promised to them in the document. 

It should be noted that prenups don’t expire unless the couple wrote what’s called a “sunset clause” into it. A sunset clause or provision typically states that the prenup is valid for a certain period after the couple is wed or the prenup is signed. It could be any number of years, although it’s often 10, 20 or more – with the assumption being that if the marriage lasts that long, the couple will be together forever. Of course, many couples divorce after far longer marriages.

Other reasoning behind sunset clauses is that so many things will have changed after a number of years that many of the provisions will no longer be relevant. A prenup can’t be “renewed,” but a postnuptial agreement can be developed to update the terms of the prenup.

Don’t forget about your sunset clause

Don’t let the date of your sunset clause pass unnoticed. If both spouses continue to be fine with the terms of the prenup, there’s no need to do anything until the “sunset” date nears. Then it’s time to determine whether to put a postnup in place.

A lot of things change over the years. One spouse may have begun earning more money than they ever imagined. A spouse who originally intended to pursue a career may have chosen to become a stay-at-home parent. Even if you don’t have a sunset clause, it’s a good idea to review your prenup after a few years or when your financial situation or other things in your marriage change to make sure it still works. If it doesn’t, drawing up a postnup can help you update the provisions you originally included and potentially add others.

Whether you’re contemplating a prenup prior to marriage or considering a postnup a number of years in, it’s essential for both people to have their own legal guidance to help them protect their rights and interests.

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