April 15, 2014

Mental Stoppers to Prenuptial Agreements

 As Dennis Green, former Vikings coach, once said – “The beauty of living in America is that anyone can have an opinion about anything. The other great thing about America is that I don’t have to listen to them!

Opinions are simply points of view. A mistake many of us make is thinking that we should sanctify our ‘points of view’ into something that has a higher stature, so we elevate them into opinions. It occurs to me that once I begin to describe my philosophies as ‘beliefs,’ an interesting thing happens. I immediately begin to defend them, look for information that supports them, and avoid information that challenges them. Soon I find myself defending all kinds of things I might not even believe any more!

There are several mistaken assumptions about prenuptial agreements that are frequently mentioned. These are all good examples of thoughts that somehow get elevated to beliefs without necessarily undergoing any serious scrutiny. I will offer these common assumptions, together with some ideas that push back on these.

One:   Prenuptial agreements won’t be upheld by the court.

It is true that these are perhaps the most unenforced contracts under the law, but there are a number of reasons for this. For one thing, every marriage that ends up being ‘happily ever after’ never submits a prenuptial agreement to a court. Every marriage that ends with parties successfully crafting their own resolution ends up never submitting their agreement to a court.  Every relationship that self corrects over time may never submit their agreement to a court.

Keep in mind that the ONLY time a prenuptial agreement will be seen in court is when the parties are in court themselves, because they cannot navigate their own divorce.  Couples who take the time to negotiate martial issues BEFORE they enter into marriage, it seems to me, improve their chances of resolving issues between them after they are married, thus keeping them out of court.

When prenups are NOT upheld it usually has to do with the rigorous scrutiny that is applied, by law, in their interpretation. For example, it is imperative that each party have separate legal advice at the time the agreement is drafted. If they didn’t, the agreement will be defeated by excluding it as admissible.

The court, under Minnesota law, must make a threshold determination that the agreement was fundamentally fair at the time it was drafted. Only if it passes this test will it be given a second scrutiny as to whether the agreement is still fundamentally fair at the time it is being submitted into evidence. Makes sense, does it not, that a couple who have been married for two years will have a difference level of scrutiny than the couple married twenty-five years with a prenup.

Two:   Prenuptial agreements are not romantic.

This a subjective opinion. There is, of course, no legal definition for romantic.  In reality, there are few things that can ground a relationship deeper than the integrity to have principled conversations about the financial attitudes of each party and their expectations going forward as a married couple. Having a full and fair disclosure of all relevant financial circumstances builds the kind of trust that successful marriages are built upon. This reason fails to carry water, as it were, when considered under the long term aspirations that a marriage be durable. It is only un-romantic if the spirit of the negations are conducted devoid of love.

Three:   Prenuptial agreements are only for the benefit of the husband.

Again, this is an uniformed opinion. Fundamental fairness is protected more in these agreements than in most other business transactions. If a prenup is slanted in one person’s favor, this can be a basis for having the agreement disallowed into evidence in a court proceeding. It is usually imperative that the agreement meet high standards that protect the fundamental fairness of the agreement.  If an agreement is enforced for the benefit of the husband, it is likely a result of the wife not entering the process on a serious level to begin with, and having competent legal advice.

Four: Prenuptial agreements are only beneficial for the wealthy.

It is true that one of the attractions of this process is for a wealthy spouse to protect themselves from someone who is marrying them for their wealth. Relatively few marriages start out from this frame of reference. With the increasing financial awareness that both men and women possess in this day in age there can be a benefit to nearly everyone to have such an agreement. These agreements can be tailored to meet the unique circumstances that any couple may find themselves in. Indeed, the best measure of success for a prenuptial agreement may well be the fact that is never presented in evidence to a court.

Five: Prenuptial agreements are only helpful if the marriage ends.

This is simply not true. A prenuptial agreement can be a very effective estate planning tool for both parties, to protect them not only in the event the marriage ends, but also to establish a solid framework for building a family. A well crafted prenuptial agreement can actually be one reason why a marriage does not end in divorce.

Six: These contracts are expensive.

If you consider both the expense many people incur for a wedding, and the incredible expense that a contentious divorce might have, these contracts are in the bargain basement, a relatively small one time cost for something, much like health insurance, you hope to never use, but will grateful you have it if you need it.

One other peripheral benefit of a well drawn prenuptial agreement is that it provides a baseline established picture of the financial circumstances of parties at the start of their marriage. This is invaluable in case of a divorce, and very helpful for the parties to chart the growth and changes in their marital partnership during the course of the marriage.

And that is at the heart of what every successful marriage hopes to accomplish.

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

Tagged with:

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>