Premarital agreements have become very common in New Mexico, especially for persons entering a second or third marriage. For couples who own substantial assets, a premarital agreement offers both benefits and risks. Such agreements generally specify how property and income are to be divided if the couple decides to seek a divorce and whether and how much alimony and child support one spouse shall pay to the other.
Prenuptial agreements are governed by the Uniform Premarital Agreement Act, a statute adopted by the New Mexico Legislature in 1995. The statute prescribes the formal requisites of such an agreement, the topics that can be included and procedures for modification or enforcement. Premarital agreements can be very helpful for couples where one or both spouses own substantial assets. A premarital agreement can specify which assets belong to each spouse and which assets are owned by the couple. New Mexico is a community property state, and any assets acquired during the marriage presumably belong to both spouses. An important benefit of a premarital agreement is a clause that protects income earned on investments owned by one spouse from claims of the other spouse under community property rules.
The biggest risk in signing a premarital agreement is an unexpected change in the financial circumstances of either or both parties. For example, if a premarital agreement specifies the amount of spousal support or child support to be paid in the event of divorce, the unexpected increase or decrease in the income of one spouse can seriously change the anticipated impact of the agreement. A serious illness can also upset the assumptions on which the prenuptial agreement was based.
Any person who is thinking of asking his or fiancé to sign a prenuptial agreement, or any person who has been asked to sign such an agreement, may wish to have the agreement reviewed by an attorney who specializes in divorce and marital issues. A knowledgeable and experienced attorney can explain how an agreement works, identify potential long term problems and provide advice on whether the agreement is suitable for that person’s financial situation.
Source: New Mexico Stat. Ann. Article 3A, Uniform Premarital Agreement Act, accessed on Aug. 3, 2015