September 4, 2015

5 Things to Consider About Prenuptial Agreements

165030753-public-discourse-gettyimagesSo, here is another one of those 3, 5, 7, 8, etc. things/reasons to do/not do something. In thinking about this blog I actually found an article called 5 Realities About Prenuptial Agreements – Why Having One May Be a Bad Choice For Your Marriage.

I must confess, it had me shaking my head. For example, this mediator suggests that simply negotiating a prenuptial agreement may irrevocably corrode your marriage, making divorce more likely. The parties do not generally have equal bargaining power. These agreements are generally not appropriate for first marriages whether or not there is a disparity in income and assets. Such agreements often damage the relationship between the two families-of-origin. The terms of such agreements are often quite unfair at the time of divorce, even though they are generally enforced by a court.

While these points are inconsistent with my personal experience in this area, I certainly would not say they could never happen. They raise questions for me, such as, if simply negotiating an agreement could “irrevocably corrode your marriage,” does it follow that by NOT talking about these things you are more likely to have a dream marriage? If you do not have equal bargaining power are you better off avoiding considering your options? Why would a first marriage be an inappropriate time to talk about hard topics? How healthy will your marriage be if your choice to consider difficult issues might be the source of a family feud? What are the odds that a court will later enforce an agreement that is not fair when presented?

It has been said that marriage is an agreement, the terms of which are explained to the parties at the time the marriage ends. When you enter into marriage, you will have an agreement of sorts between you – it is called Minnesota Statutes §518 et. seq. Being ignorant of the things it addresses is not the bedrock of a healthy marriage.

Prenuptial agreements are the victims of bad press. It has been said that a prenuptial agreement is a contract between two people love each other almost as much as they love their money. Clever and pithy, but hardly profound or intelligent.

The laws in most states establish legal tests that must be met before a court can enter such an agreement into evidence in a later proceeding. First, the court must determine that there has been a full and fair disclosure of the assets and debts of each party. Second, it must be established that each party had the opportunity for legal representation in the process, and was not compelled under duress to sign something they did not understand. Next, the court must establish that the agreement was fundamentally fair and equitable at the time it was entered into. Finally, the court must establish that it is fundamentally fair and equitable at the time it is being submitted for enforcement.

Beyond the legal strictures, other practical considerations support these agreements. There is particular merit to having a full and fair disclosure of the circumstances of each party. Taking the time to obtain established disclosure of all financial accounts, assets and debts provides a valuable base line for the marriage. Not only can it resolve later difficulties in trying to establish them, it can be very helpful in case of bankruptcy or other significant changes in circumstances.

If you are not able to have difficult conversations about uncomfortable topics when you are basking in love for one another, how well do expect those conversations to go if the marriage is on the brink of divorce? If even one person is concerned about the financial circumstances of the parties or the attitudes of their partner about finances, or any other concerns of a like nature, might not the marriage be enhanced by opportunity to discuss these concerns and agree in principle as to how they will be addressed? Maybe so. Maybe not.

You have the right to decide for yourself whether a prenuptial agreement can have value. Whatever your choice, the wise thing to do is to carefully consider your options and realities are, and make a principled decision. Then, live with it.

Consult any collaborative professional to talk more about the options you have.

Bruce PeckABOUT THE AUTHOR
Bruce Peck
Attorney

Bruce is one of the founding members of the Collaborative Law Institute.
Back in the Wonder Years, this small group was trying to figure out what a new way of practicing family law might look like. Today the collaborative law concept has exploded, not just throughout the United States, but also internationally. For over thirty years Bruce has continued to hone his skills to provide the highest quality of services to family law clients. He helps good people make tough choices during difficult times.

Bruce is a laid back and easy going person who listens well to others. He is a shameless optimist who can always see possibility and opportunity. Being very curious by nature, he is a voracious reader. His love for words has drawn him into being an avid poet.

Bruce’s skills supports clients interests without alienating their spouse. When the parties reach agreement, it is not under duress. They have the time to discuss all decisions with their attorneys before signing the agreement. Once completed, the stipulated divorce is filed with the court for a default hearing in which neither party, nor their attorneys, ever have to set foot inside a courthouse. Learn more at www.BrucePeckLawOffice.com

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