Welcome to CPA at Law, helping individuals and small businesses plan for the future and keep what they have.

This is the personal blog of Sterling Olander, a Certified Public Accountant and Utah-licensed attorney. For over thirteen years, I have assisted clients with estate planning and administration, tax mitigation, tax controversies, small business planning, asset protection, and nonprofit law.

I write about any legal, tax, or technological information that I find interesting or useful in serving my clients. All ideas expressed herein are my own and don't constitute legal or tax advice.

Introduction to Premarital Agreements

A prenuptial or premarital agreement refers to "an agreement between prospective spouses made in contemplation of marriage and to be effective upon marriage." Such agreements are strongly recommended anytime an individual with separate assets intends to marry.

The reason why a premarital agreement is important is because, by virtue of a marriage, spouses assume certain legal duties and obtain certain rights with respect to their spouse and their spouse's assets, especially in the event of divorce or death. For example, in the event of divorce in Utah after a long-term marriage, a judge would likely award alimony to one spouse to the extent needed to maintain the lifestyle they enjoyed during the marriage for a period up to the length of the marriage. Alimony can and often is a negotiated term of a premarital agreement.

Another example of a right that a surviving spouse has in Utah is the right to an "elective share" of the assets of the first spouse to pass away, calculated as one-third of the "augmented estate." This right of election effectively makes it nearly impossible to disinherit a spouse, even in very short-term marriages, and even where a trust or other non-probate transfers are involved.

The right to an elective share can be waived, and often is waived in a premarital agreement. However, the waiver can be set aside by a court pursuant to Utah Code 75-2-213(2), which contains essentially the same standard for setting aside a premarital agreement itself under Utah Code 30-8-6(1). Specifically, such agreements must be voluntary and not fraudulent (or not "unconscionable" in the case of an elective share waiver) and must have been accompanied by adequate disclosure or knowledge of the property or financial obligations of the other spouse.

There are of course many additional legal implications of a marriage and a premarital agreement. These should be discussed with an experienced attorney well in advance of the wedding date.