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Should your prenup have a sunset clause?

On Behalf of | Oct 25, 2024 | Prenuptial Agreements

Signing a prenuptial agreement can offer you peace of mind. It helps you set clear terms should the marriage end and protects your assets – regardless of your financial status. When drafting a prenuptial agreement, couples often focus on the what-ifs of property division, spousal support and other financial aspects. However, one crucial element that many usually overlook is the sunset clause.

What is a sunset clause?

A sunset clause is also known as a sunset provision or termination clause. It determines the length of time that a contract remains in effect. A sunset clause in your prenup essentially sets an expiration date for the agreement.

The prenup becomes null and void after a specified period, typically several years into the marriage. For instance, you and your spouse might agree that after 10 years of marriage, your prenup will end. Any agreements you previously had on how to divide your assets will no longer apply.

Benefits of including a sunset clause

A sunset clause acknowledges that marriages evolve. Including a sunset clause in your prenup offers benefits, such as:

  • Shows trust and minimizes pressure: Adding a sunset clause can show trust in your partner. Knowing the contract has an end date may help relieve feelings of pressure and resentment that having a prenup may bring.
  • Offers flexibility: Sunset clauses encourage you to revisit your financial arrangements as time passes, allowing you to adapt to changing careers, family situations and more.
  • Prevents disputes: Having the opportunity to change and update your prenup can help minimize disputes over what may turn into outdated or unfair agreements as your circumstances change.

However, a sunset clause isn’t without its cons. If you get a divorce after the prenup expires but before you can get a new one signed, you might face unexpected financial challenges.

Deciding if a sunset clause is right for you

Deciding whether to include a sunset clause depends on your unique circumstances. Consider factors such as your:

  • Current and projected financial situations
  • Long-term relationship goals
  • Comfort level with potential future negotiations

Ultimately, whether you include a sunset clause in your prenup depends on your situation, needs and priorities. It’s essential to discuss this provision with your partner and a trusted legal professional to determine the best approach for your situation.