Back to Blog

my-alt

From The Desk of LAW | Prenuptial Agreements 101

     

Written by it's over easy Founder & Family Law Attorney Laura Wasser

While it might seem odd to have an article about prenuptial agreements (PNA’s) on a website where we focus on divorce mediation, but the fact is that nothing could be more appropriate. The principles behind what a prenuptial agreement is are the same that I counsel our clients to adhere to in their dissolution process. They are also the very principles which could save your marriage; clear and considerate communication. So many couples rush to the alter without even knowing that they are entering into a legal contract governed by the state in which they live during their marriage. Think about how crazy that is! You have contracts for the venue where your wedding is being held, for the flowers, the cake, the photographer, the DJ or string quartet. Most likely there is even some kind of service agreement between you and your priest or rabbi who is going to officiate the ceremony. But the partnership agreement which is being celebrated on that magical, tuxedo and tulle clad, champagne-infused day is often not discussed or reviewed at all.

 

In California, the moment you tie the knot everything you Earn, Produce or Create is Community Property; that means one half of it belongs to your spouse. It’s easy to understand that “Earn” means your wages, your bonus your compensation for services. But how about Produce or Create? If you are a sculptor, the sculpture is one half hers. A screenwriter, the script is one half his. Even if the sculpture or script do not sell for several years after the marriage has ended, your lovely spouse still has an ownership interest. By the way, debt is treated in the same manner. So a serious on line shopping problem or a student loan is the gift that just keeps giving; to both parties should the relationship end.

Some other things to consider are spousal support, alimony and/or maintenance payments which most couples never contemplate before taking a walk down the aisle. Sure, you’re cool covering the vacations, dinners and car lease payments when you guys are married. But did you know that as the breadwinner, the obligation to maintain that lifestyle stays with you after a breakup?

Having a discussion about the possibility of a prenuptial agreement in California or wherever you live makes a great deal of sense if, for no other reason than the fact that both parties could usually use an education about the law which governs them. It gets you talking about what is admittedly not the sexiest part of a relationship but which could very well give each of you a better understanding of what is expected of you in this partnership, which I’m guessing you both hope will last until death do you part.

Once you know the law, you are better equipped to determine whether a prenuptial agreement would be beneficial. For example, a second marriage for an executive who has a long and profitable career launching internet start ups may be an opportunity for her to opt out of the Community Property structure. She already divided 20 years of her earned savings and retirement when she split from her first husband. The heir to a wealthy family need not worry about having to give his or her inheritance to an ex as it is Separate Property. However, if the couple is living a lifestyle which is sustained by that inheritance this will be taken into account in calculating the support payments which are sure to be requested. A prenuptial agreement can limit the amount and duration of that support to something reasonable.

In order for a prenuptial agreement to be absolutely enforceable, most states require full disclosure of assets and income, some period of advance notice and opportunity to review the document before signing (and before the wedding).  Each party must be represented by counsel.

Picking the right attorney for negotiation and preparation of a prenuptial agreement is important. You do not want someone who you feel is really negotiating your future divorce or, who might blow your chances of either the agreement or the wedding entirely. The more direction you can give your lawyer the better, but for procedural decisions in terms of drafting or provisions which may not be enforceable (there really is no such thing as a “cheating clause” that holds up in court) the deal points are decided by you and your spouse-to-be. As I said before, communication is key. Be honest about your expectations and concerns. This is an opportunity for transparency in your relationship which could benefit you both until death do you part. Don’t make your lawyer take the heat for you. If you want more money, say so. If you wish to keep your earnings separate, own it.

Communication about even the issues which cannot be included in the prenuptial agreement is super helpful. Issues regarding your future; when and if you have children, who will take care of them? Will one (or both) of you stop working? If so, for how long? How much do you hope to save each year? Will you buy a home or are you renters forever? What happens when your parents get old? Will they live with you or will you pay for their care? These are issues that would not be included in a prenu but discussion about them opens up lines of communication that will serve you for years to come.

I created our online divorce platform itsovereasy.com because of my firm belief that there has to be a better way to divorce. Whether you have a prenuptial agreement or not, let me be clear: there is nothing easy about divorce and it is often one of the most difficult times in a person’s life.  I just don’t think the legal process should make what is already a devastating, emotional event unnecessarily burdensome. The bottom line is that a lot of couples are capable of working out their issues on their own and should not have to pay high legal fees to facilitate what often boils down to common sense thinking. There is something quite empowering about being the masters of your own destiny.  The money you don’t spend on attorneys can go toward setting up your new lives, your children’s futures, or perhaps, and perhaps a bottle of champagne to toast new beginnings!”

As a mom of two kids successfully co-parenting with their fathers, and an attorney who has been practicing Family Law for over 20 years, Laura Wasser has made it her life’s work to take the mystery and misery out of divorce for people of all backgrounds. She is the founder of it’s over easy, which picks up where she left off in her best-selling book It Doesn’t Have To Be That Way:  How to Divorce Without Destroying Your Family or Bankrupting Yourself – a digital platform that can reach more people and assist them through every stage of the divorce process.

 

 

Comments