For some couples – especially those entering second marriages – a prenup can be an excellent vehicle to take care of financial and estate planning issues. Consider someone entering a second marriage who has kids from a first marriage. He or she may want a prenup to ensure the kids are taken care of and at the same time, want to be certain the new spouse is also secure.
The prenup generally describes what happens to a couple’s joint assets and separate funds or assets during the marriage. Each couple’s situation is unique and it is important that the prenup take this into consideration and not simply be an “off the shelf” document indiscriminately applying terms. The “off the shelf” document can be extremely technical and often has needless provisions that raise issues which in turn foster distrust. People love to come in with “off the shelf” prenups usually to save money; however, it is easy to see that the other spouse is trying to understand why this kind of document is even necessary. Most of the time, these types of prenups do not serve the couple well and in fact, cause more issues than they solve.
The prenup is gaining popularity and when thought through as a vehicle that can help a couple as opposed to hurt them, it is very good. When a potential prenup comes to my office, it is important to me that we discuss why the prenup is needed in the first place. Thereafter, I will discuss the potential detrimental effect it could have on the marriage.
Laurie Israel, Esq of IVKD Law is an attorney I read regularly because she cares about families and she seeks to do “no harm” to her clients. I agree 100%. The following excerpt is taken from an article she wrote, entitled, The Art of the Prenup:
Because of my concern about hurting a marriage, I try to tread very lightly in cases in which I draft a prenuptial agreement on behalf of a client. I try to draft the restrictive terms in as limited manner as possible, while still providing whatever protection is needed.
There may be disappearing provisions, based on the length of the marriage. There may be “sunset” provision, in which the prenuptial agreement will self-destruct at a certain point in time. There might be provisions that are more generous and create a more “blended” marriage as time goes on and the marriage proves successful. There may be differing provisions depending on whether the couple has children together. The prenuptial agreement does not need to foreclose alimony, in spite of the common “scorched earth” draft that seems to be circulated among attorneys. Sometimes waivers of alimony can be very unfair as the years go by. The prenuptial agreement could just affect a limited issue, such as parental inheritances or one particular premarital asset.
The prenuptial agreement should take into account death as well as divorce. (This is an element that is missed in many off-the-shelf prenuptial agreements.) This is to ensure that a party’s death benefits, if the marriage is intact, are not less than his/her divorce terms. If this issue is not addressed, a disparity could exist and hurt the surviving spouse in an intact marriage.
If I am engaged in working with a client on a prenuptial agreement, I try to do all these things well before the wedding date, so that the negotiations can be processed in the most thoughtful, kind way.
In many cases, having the prenuptial agreement negotiated under the collaborative law process can be very productive in helping the parties addressing the issues in a constructive and not-hurtful way. In the collaborative law process, each of the parties will be working with a collaboratively-trained lawyer and the negotiations will be done in a series of four-way, face-to-face meetings. For more information, search “collaborative law” on the internet. A couple may also see a mediator to work out the terms of a prenuptial agreement. It is strongly advisable that the terms be reviewed (and perhaps fine-tuned) by separate lawyers representing each of the parties in that case.
So, there are many things to contemplate when thinking about having a prenuptial agreement. It is very important for a couple to seriously consider the impact and potential terms prior to proceeding.