Under Nevada law, separate property of spouses is defined as all property acquired before the marriage, or all property received after the marriage by device, bequest, descent, gift, or an award for personal injury damages. Nev. Rev. Stat. § 123.130. Contrastingly, the property acquired after the marriage is considered to be the property of the community. NRS § 123.220. However, Nevada provides an exception of property that would be considered community. If there is an agreement in writing between the spouses, property that would be considered the community’s would be characterized as separate property. NRS § 123.220(1). This is known as a premarital agreement. Nevada law defines a premarital agreement as an agreement that prospective spouses make with the contemplation of marriage. NRS §123A.030. The agreement of the spouses would be effective upon the marriage, meaning at the date of the marriage. Id. The requirements of a premarital agreement are: 1) a writing; and 2) signed by both parties. NRS § 123A.040. Although marriage is considered to be contractual, a premarital agreement does not require “consideration” as required in contract law. Id. Essentially, the marriage is the “consideration” for the premarital agreement.
Spouses may form a premarital agreement for nearly anything. NRS § 123A.050(1). The only prohibition in a premarital agreement under Nevada law is the restriction of custody and the restriction of child support. NRS § 123A.050(2). This means that alimony may be eliminated or modified in a premarital agreement. NRS § 123A.050(1)(d). Buettner v. Buettner was the case that formally approved premarital agreements in Nevada. Buettner v. Buettner, 89 Nev. 39, 45, 505 P.2d 600, 604 (1973). Prior to this, premarital agreements were considered to be void as against public policy. Id. Since premarital agreements are no longer void as against public policy, the Nevada legislature has determined how a premarital agreement may be unenforceable. Under the NRS, a showing of one of the following three instances will make a premarital agreement unenforceable: 1) a party did not execute the agreement voluntarily; 2) the agreement was unconscionable at the time of its execution; or 3) a demonstration of unequal bargaining position. NRS 123A.080(1). Under the voluntariness factor, a party that did not understand their rights, was under extreme duress, or did not have an opportunity to consult an attorney prior to the agreement’s signing will be considered un-voluntary. Additionally, a court will determine that the agreement is unconscionable when it “shocks the conscious” of the court. However, the agreement must have been unconscionable at the time of its execution. For example, if a married couple decided to form a premarital agreement that eliminates alimony, and if one spouse earns exponentially more well after the execution of the agreement, a court will not consider the financial disparity as unconscionable. Lastly, three elements need to be met for the court to consider a premarital agreement unconscionable based upon a spouse’s bargaining power. Before the execution of the agreement, the following need to be demonstrated: 1) that there was not a “fair and reasonable disclosure” of the property or financials of one party; 2) that spouse seeking the agreement’s unenforceability did not “voluntarily or expressly waive” the right to the property and financial disclosure, in writing; and 3) that the party did not have, or reasonably could not have had, an adequate knowledge of the property or financials. NRS § 123A.080(1)(c).
Conclusively, Nevada allows for premarital agreements within the bounds of the NRS. For nearly all situations, the premarital agreement will be upheld, excluding the factors set forth in NRS 123A.080(1) that would make the agreement unenforceable.
Thanks to a trial lawyer from our friends at Eglet Adams for their insight on premarital agreements in the state of Nevada. Be sure to contact a lawyer near you to get a premarital agreement together so that you can avoid a trial later down the line if you are facing a divorce and division of assets.
