The truth of the matter is that asking your fiancee’ to sign a Prenup is not the most romantic thing you will ever do. Below are a few tips on planning a marriage with all the love for that other person.

Understand what it is and what it is not.

Some couples forgo the Prenupt conversation for fear that their partner may suspect that they have reservations about the solidness of their relationship. The best thing about a Prenupt is that it does exactly what is supposed to do, it either breaks you up before you commit financial suicide or it makes your relationship even stronger. Ironically, and contrary to long-held common belief, according to family surveys, men and women sign Prenupts at an evenly low 16% rate across the table. Incredibly, women have a higher percentage of initiating a Prenupt agreement than men.

Whatever the gender, a Prenupt is especially vital to young adults starting in their respective careers. In New York, a spouse may be entitled to a significant percentage of the value of a professional license earned during the marriage or a master’s degree earned during the marriage.

If your spouse supported you–even by giving you gas money, for example–during your days as a law school, medical school, or business school student, then come divorce time, you essentially may be working your entire life for your former spouse. Why? The reason for this is simple, but the emotions are a lot more complicated. Because the math formula used to calculate the value of the license contemplates the value amount you will make during your entire working life, the law says that your spouse can collect money decades after the divorce.

Indeed, the average couple who walks down the aisle doesn’t want to think about possible future financial disagreements. They don’t even consider the future need to deal with a divorce and all of its headaches. Regardless of your confidence in the relationship, the US national divorce statistics give a more realistic, sobering view of marriage and its potential disadvantages.

Take a look at the statistics and be honest with yourself.

According to the United States Census Bureau, more than fifty percent (50%) of all marriages end in divorce. In 2002 there were 136,684 marriages in New York, and in that same year, there were 65,428 divorces. New York is in part with the rest of the country, where the divorce rate is at 52 percent. Those numbers are especially hard to accept if you were a couple contemplating any legal union.

Understand a Prenupts’ true importance.

So how important is a Prenupt in light of these awful statistics? Imagine having to choose between keeping the family’s business or having your former spouse for a business partner!

Who’s it for?

Some people may suggest that a Prenupt is only for those wealthy forks. This could not be any further from the truth a Prenupt is for everyone. I always advise my clients to consider a Prenupt whenever they are considering marriage. A Prenup is as essential to marriage as a wedding ring nobody should get married without one.

Why is it important?

The average working-class couple owning no property or significant assets should also sign a Prenupt because chances are they will inherit property or others during their marriage.

This could be you. For example, remember the classic example illustrated by Colombian-born Juan Rodríguez, who was the sole winner of the New York’s lottery multi-million dollar jackpot? Rodríguez had arrived in the United States in 1982 and worked as a parking lot attendant for most of his life. Even though he had been separated from his wife, he never tried to divorce her for lack of money. Mr. Rodriguez did not have a Prenup. His estranged wife, who was living apart from him at that time, received nearly half of his winnings in a divorce that was filed days after he won the lottery. Had a prenuptial agreement been in place, she never would have gotten a cent.

Save yourself the headaches.

Unfortunately, couples sometimes overlook this important agreement before they commit to a lifetime financial partnership. A Prenuptial agreement is very much like a road map: it guides you along the ride of marriage. Think about it this way: just like going on a long cross-country trip, requires a good map to guide you, so to does marriage require a Prenupt agreement.

Most people find they need something to help them understand as much as possible the intentions and goals, and emotional needs of the other person BEFORE they commit their life in marriage. With a Prenupt, once you encounter marital problems, you’ll always have the written agreement as a reference to put you both back on track.

Clients must therefore understand that contracts for goods or services are different from those who plan to be married. In New Jersey, the New Jersey Supreme Court, in the case known as Lepis V. Lepis, created the quintessential loophole, enabling potentially endless modifications of family support provisions, regardless of whether they were ordered by the Court or stipulated to by the parties. The only requirement for this review is a significant and relevant change of circumstances. Such contract-loosening changes are typically required to be unanticipated, substantial, and non-temporary. The powder keg language of Lepis reads as follows: “Contract principles have little place in the law of domestic relations.” With that, NJ divorce lawyers must pay close attention to five key points.
First, note that properly drawn prenuptial agreements are given the initial presumption of validity.

By “properly drawn,” we mean that:
1. the parties were independently represented by counsel,
2. there was no coercion or duress,
3. that there was an appropriate level of financial disclosure,
4. the agreement was essentially fair.
At the time of attempted enforcement by one party, the burden of proof for showing that the agreement is somehow unconscionable is borne by the party seeking to avoid enforcement. Otherwise, the prenuptial agreement should be enforced.

Second, a prenuptial agreement will not be considered to be unconscionable unless it can be shown that enforcement of the agreement will result in a standard of living for any party that is “far below that which was enjoyed before the marriage.”

Third, soon after the Supreme Court’s finding in Lepis, clever New Jersey divorce attorneys came up with the idea of incorporating anti-Lepis clauses into their property settlement agreements. This sort of thinking can be applied to the drafting of a prenuptial agreement as well. Such clauses can prevent alimony liabilities, or can ostensibly limit them in the event of divorce. To add yet another level of complexity, the anti-Lepis clause itself can be the subject of a modification motion. As equivocal as this may sound, sometimes these clauses are enforceable, and sometimes they are not.

Fourth, if the objective is to attack an antenuptial agreement at the time of attempted enforcement, the New Jersey divorce lawyer is wise to read the case of Marchall v. Marchall. In Marchall, the Court stated that antenuptial agreements should be regarded as subject to modification because of “changed circumstances” in the same manner as property settlement agreements. This statement, however, was only in dictum and does not fall into the category of binding precedent. Notably, Marchall was only a Trial Court decision, and therefore not binding on the courts of other counties, as an Appellate level or Supreme Court level decision would be. The Marchall decision was also decided four years before the adoption of the Uniform Premarital Agreement Act in 1988. Furthermore, the Marchall decision predated the Appellate level decision in Morris v. Morris, which case expressed the teeter-totter viewpoint that sometimes anti-Lepis clauses are enforceable and sometimes they are not.
Fifth, the case of Pacelli v. Pacelli must also be explored. In Pacelli, a mid-nuptial agreement was involved. This agreement was entered into between the parties some 11 years after their marriage and after having two children. The Appellate Division refused to enforce this agreement. The Appellate panel found that the agreement was unfair when it was entered into in 1986 and likewise unfair when enforcement was sought in 1994. The Court did not believe that such mid-nuptial agreements should be treated the same way antenuptial agreements are treated. The Appellate Division opined that “the dynamics and pressures involved in a mid-marriage context are quantitatively different.”

When a prenuptial agreement is executed, under circumstances devoid of coercion or duress and where the requirements of the Uniform Premarital Agreement Act are met, Lepis should not apply, and the agreement should not be modified. The only exception would be under the unconscionability standard of the act. Ironically, that is the same standard that was used for modification of New Jersey matrimonial agreements before Lepis, under Schiff v. Schiff. Sometimes the old ways are the best.

A premarital agreement may also be called an antenuptial agreement. The terms are synonymous. Prenuptial or antenuptial agreements refer to a contract between two persons planning to marry, which governs the rights and liabilities of the parties if they should happen to get divorced or in the event one spouse dies. In short, a prenuptial agreement determines the rights of parties to property, responsibility for debt and may even determine whether spousal maintenance (alimony) is paid. Prenuptial Agreements, however, cannot affect rights to custody or child support since such determinations must be based on the best interests of the child standard and subject to court review. Prenuptial Agreements are valid in all 50 states and the District of Columbia. It doesn’t matter whether it is a community property state or an equitable distribution state.

Why Prenuptial Agreements are Prudent

A premarital agreement acts as a safeguard for both you and your spouse-to-be. It protects your assets and may prevent expensive and acrimonious litigation if a divorce should occur by defining the rights and responsibilities of the parties in advance. With today’s divorce rate hovering around 50%, a prenuptial agreement may be one of the most prudent decisions in your life. This is particularly true for business owners who wish to preserve what they have worked so hard to build.

There are certain key ingredients you should include in your prenuptial agreement to ensure that your prenuptial agreement is binding.

1. List all assets, liabilities, income, and expectations of gifts and inheritances. Full disclosure is a critical element of a prenuptial agreement to ensure that it is binding.
2. Describe how premarital debts will be paid. This will help to identify which debts will be satisfied by marital resources or premarital resources.
3. Resolve what happens to your premarital property about changes in value, including appreciation, gains, income, rentals, dividends, and the proceeds of such property in the event of death or divorce. The marital residence is often an issue that can become contested in the event of divorce. Decide who, or if both of you, will own the marital residence and secondary homes in the event of death or divorce. How will any proceeds from those homes and real estate assets be divided in the event of a divorce?
4. Clarify what will happen to each property, whether jointly or individually owned, such as real estate, artwork, collectibles, and jewelry.
5. Alimony, maintenance, or spousal support, is another particularly contentious issue. Prenuptial agreements allow parties to allow for a waiver or property settlements instead of support. Some states are reluctant to limit recovery in this regard. As a result, it is important to understand your state laws.
6. Decide what will happen in the event of a divorce about medical, disability, life, or long-term care insurance coverage.

Prenuptial agreements have certain requirements. Generally, they are as follows: there is full and fair disclosure of the earnings and property of each party, and the parties have had an opportunity to consult with legal counsel of their own choice.

As a general rule, the agreement must also be:

1. in writing;

2. executed in the presence of two witnesses; and

3. acknowledged by the parties before a person is authorized to administer an oath (notarized).

In most cases, prenuptial agreements are upheld. It is only in cases where there was not full disclosure or the agreement becomes substantively unfair at the time of the divorce that the Court’s strike down the validity of such agreements. An agreement may be deemed substantively unfair if the circumstances on which the agreement was based have changed so drastically that enforcement would not comport with the reasonable expectations of the parties at inception.

Prenuptial Agreements & Spousal Maintenance

Courts sometimes find antenuptial agreements substantively unfair about provisions seeking to limit or eliminate spousal maintenance (alimony) payments. Some have ruled that there is sound public policy rationale for not strictly enforcing such provisions, which, even though entered into in good faith and reasonable at the time of execution, may have become unreasonable or unconscionable as to its application to the spouse upon divorce. The Courts are essentially attempting to prevent ex-spouses from becoming wards of the state. If one spouse’s health and employability have greatly deteriorated during a marriage, courts may be reluctant to enforce the maintenance provisions of an antenuptial agreement.

Some cases that have been decided:

1. Invalidated an antenuptial agreement which sought to preclude spousal maintenance where the lesser earning spouse contracted a venereal disease from the husband resulting in medical expenses;
2. Invalidating an antenuptial agreement that sought to preclude spousal maintenance where the marriage was long term (more than 20 years), and the wife had been out of the workforce for some time and suffered from an emotional disability. The trial court concluded that unforeseen circumstances invalidated the antenuptial agreement by rendering it unconscionable.

It is advisable to contact an experienced lawyer in your state to avoid problems with your prenuptial agreement. Remember, as Benjamin Franklin stated, “An ounce of prevention is worth a pound of cure.” 

Visit us at www.divorceinstitute.com.

Some prenuptial agreements can cover day-to-day details, such as who will pay the mortgage and other bills or how to handle child care. Since more couples are signing prenuptial agreements, you need to discuss this openly with your intended spouse. If you both feel a prenuptial agreement fits your situation, you each need to see a lawyer discuss it further.

Even though more prenuptial agreements are being signed than ever before, it is something to consider only if one of the following applies to you:

1. If either of you has children from a previous marriage.
2. If you own a business or are involved in a family-run company.
3.  If either one of you has significant assets which you want to keep separate. 
4. If you are concerned about the amount of debt of the other party. 
5. If you are giving up a lucrative career to get married. 

Once you have decided if you need a prenuptial agreement and what should be in it, the question becomes whether or not it will be valid and enforceable. There are certain essentials to creating a valid prenuptial agreement:

The agreement must be in writing and executed before the marriage, preferably in front of a notary public. Neither party should be in the position of having to sign the agreement on short notice. If your future spouse confronts you with an agreement on the day of your marriage, it will probably not be enforceable.

The agreement must be fair and reasonable under all of your circumstances and based on full disclosure by both parties of all assets and liabilities. One lawyer cannot fairly represent both parties. Each party to the agreement should have their attorney prepare/review the document and answer all of your questions before signing.

The sooner before the wedding date that you prepare the prenuptial agreement the better it will be for both of you and your relationship. Either party broaching this subject is likely to be suspected by the other of lack of trust. However, since more than half of all marriages do end in divorce, having a prenuptial agreement should be considered a practical thing to do and not a doomsday expression of your marriage’s chances. Open communication with your new partner could be the best way to start a new relationship.

Robert is engaged to Janet. They’re planning on getting married in a few months. Janet has several pieces of property, numerous investment accounts, and is worth millions of dollars. She’s been dating Robert for almost five years before his proposal of marriage. She’s decided that she wants a prenuptial agreement before marrying Robert, but is unsure how to tell him. Janet doesn’t want to hurt Robert’s feelings, but she knows that she should protect herself before marriage.

Ginger and William are getting married early next year. They’ve been dating for six months. William owns several businesses, properties, and other investments. His net worth is two billion dollars. He loves Ginger with all his heart and trusts her. William has told his attorney to start working on preparing a prenuptial agreement for him and Ginger. He has been trying to figure out how to tell Ginger about the prenup without upsetting her.

You say that you have assets such as property, retirement, savings, and other investments that you would like to protect. You don’t want your assets to be part of the marital pie. You trust your future spouse but still want to protect the assets you have acquired before the marriage. You’re just not sure how to discuss this subject with your future spouse without possibly offending them. Here are five tips on what you may want to tell your future spouse:
1. Your accountant is recommending that you keep your assets before the marriage separate. Blame it on your accountant!
2. If you have children from a prior relationship, you may want your children to have the assets you acquired before the marriage.
3. You just want to protect your assets before the marriage in case of future problems with the marriage.
4. Your assets before the marriage maybe for a relative or beneficiary that you want to benefit from your assets.
5. You simply want the both of you to start fresh and develop your assets together as a newly married couple.
Don’t let the issue of a prenuptial agreement be a deflator to your relationship and create a level of distrust. Explain in detail to your future spouse why you would like a prenuptial agreement, and everything between the two of you will probably work out in the end just fine.

If you decide that you want a prenuptial agreement with your future spouse, make sure you ease into discussing this subject. You know your future spouse’s feelings and emotions better than anyone else! You may even suggest that you both have a prenuptial agreement.