Premarital Agreements
Richard M. Bash - Attorney-at-Law

Things you need to know when you are considering a premarital agreement agreement

    A premarital agreement agreement is a written contract created by two people before they are married. A premarital agreement typically lists all of the property each person owns (as well as any debts) and specifies what each person's property rights will be after the marriage.


    In some states, a premarital agreement is known as an "antenuptial agreement," or in more modern terms, a "premarital agreement" or "prenuptial agreement" (slang term is "prenup"). Sometimes the word "contract" is substituted for "agreement," as in "premarital contract." An agreement made during marriage, rather than before, is known as a "postnuptial," "postmarital," or "marital" agreement.

Who Needs a Premarital Agreement?

    Contrary to popular opinion, premarital agreements are not just for the wealthy and famous. While premarital agreements are often used to protect the assets of a wealthy potential groom or bride, couples of far more modest means are increasingly turning to them for their own purposes. For example, a marrying couple with children from prior marriages may use a premarital agreement to generally replace their will and to spell out what will happen to their property when they die. In doing so, they can pass on separate property to their children and still provide for each other, if necessary. Without a premarital agreement, a surviving spouse will likely have the right to claim a large portion of the other spouse's property, leaving much less of any estate for the children. Yes, there are other ways to accommodate the children (i.e., trusts) but that is another issue for another time.

    The primary purpose for a premarital agreement is for couples with or without children, whether wealthy or not, to clarify their financial rights and responsibilities during marriage. Or they may want to avoid potential arguments if they ever divorce, by specifying far in advance how their property will be divided, and whether or not either spouse will receive alimony (and for how long). A few states won't allow a spouse to give up the right to alimony, however, and, in most others, a waiver of alimony will be scrutinized heavily and won't be enforced if the spouse who is giving up alimony didn't have a lawyer. A premarital agreement can also be used to protect spouses from each other's debts, and they may address a multitude of other issues as well. Just avoid petty stuff! It can get the agreement tossed out by the judge later.

How a premarital agreement guarantees financial protection before divorce

    Before you see a lawyer about a premarital agreement, you are going to want to learn as much as you can before taking the legal plunge. There are many things you will need to consider that have nothing to do with a lawyer well before you speak to one.

    The dilemma is how can you be in love with someone and yet not trust them when you marry? The answer is a properly written premarital agreement is more than just about money. It helps you, as well as your future spouse, clearly understand your commitment. It enables you to protect yourself financially and build a strong, lasting foundation for your new marriage.

    A well-written premarital agreement allows you to feel confident and secure that your marriage is about love and not money. It tells your future partner that you know exactly how to approach your future life in a loving and responsible way.

    Premarital agreements are recognized in all fifty states and the District of Columbia. A premarital agreement, which is also widely known as a prenup, is a legal contract that a couple enters into before they are married. Premarital agreements include provisions for certain things, such as the financial matters if one partner dies or the couple divorces. Couples can also add non-financial provisions into the premarital agreement. The provisions that are added into a premarital agreement are up to the discretion of the couple entering into the contract. The provisions vary from each separate contract and couple. These premarital agreements override state law as well as family and probate courts (because they are contracts). Likewise, in all jurisdictions, four (and maybe five) elements are required for a valid premarital agreement:

1.  The agreement must be in writing (oral premarital agreements are always prohibited).
2.  The premarital agreement must be executed voluntarily.
3.  The premarital agreement must provide full and/or fair disclosure at the time of execution.
4.  The premarital agreement cannot be unconscionable.
5.  In many states the premarital agreement must be executed by both parties (not their attorneys) before a notary public.

    The matter of having a premarital agreement should be talked about way ahead of time, well before your wedding. It is not something that should be suggested at the last minute or brought up out of the blue and just sprung on the other partner. It can be uncomfortable and overwhelming to even think about talking to your partner about having a premarital agreement. Many people have a hard time finding the right words to introduce the subject to their partner out of fear of how their partner will react. But there are more and more couples entering into premarital agreements today than ever before. Some people even see the subject of premarital agreements as a way to entice other conversations about what each partner expects from the other in terms of financial responsibilities, their lifestyles, as well as the role each will play once they are married. Topics discussed when making a premarital agreement are ones that will invariably come up after the wedding. Talking about them prior to the wedding and providing solutions for certain things in a premarital agreement can also help couples avoid divorce: the partners each knew where the other stood and what their partner expected.

    My usual fee for a premarital agreement is $800 plus the fee to have the agreement recorded at the county recorder's office ($15-50). The other party needs a lawyer as well. Add that cost in. The party seeking the premarital agreement usually pays for both my fees and those of the other lawyer, unless you can talk your potential spouse into paying for their own lawyer. The usual premarital agreement I write is 3-10 pages in length, as a function of whether or not there are children involved and how extensive the list of assets and liabilities for each party is (which is a part of the agreement). It is valid in all states.

    Here are some articles that may clarify things for you and your soon-to-be spouse. I think both sides of the argument are fairly presented. That lets you make up your own mind. I still favor a premarital agreement if one of the partners has substantially more assets than the other, if you have children of a prior marriage you wish to protect, or if you simply want the assurance that in case things go haywire, your assets are protected.

Best regards,

Richard M. Bash
8418 S. Shady Trail Drive
Pendleton, IN 46064-8643
Tele: (765) 609-2274

This page last updated June 30, 2007

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What?! You want me to sign a prenup?
A prenup may leave you cold if you're the less wealthy partner. But it could be to your advantage.

By Jeanne Sahadi, CNN/Money senior writer

March 14, 2006: 11:03 AM EST

NEW YORK (CNN/Money) You've really been looking forward to getting married except for one niggling detail: your partner has asked for a prenuptial agreement.

You want it to be no big deal, you're a reasonable person, and you understand that your partner's family may be applying pressure. Still, the request has left you feeling a little miffed.

Yes, you have less money than your fiance(e). But money really wasn't what drew you into the relationship and it certainly is not what's keeping you there.

Fair enough.

But assuming you're not marrying a controlling jerk (in which case, the prenup is the least of your worries), you might consider the three ways in which a prenuptial agreement might actually be to your advantage.

Build a foundation for your marriage

For starters, talking about a prenup (whether you opt for one or not) is an opportunity for you and your partner to get your financial lives out on the table, which is never a bad idea, since marriage is as much an economic contract as a social and spiritual one.

And, it hardly needs to be said, money can be a huge source of contention between couples, especially when it's not dealt with openly.

"(The prenup) is about having to communicate and negotiate, which will lay a foundation for your partnership," said Shae Irving, senior legal editor at legal information provider NOLO and coauthor of the upcoming book, Prenuptial Agreements: How to Write a Fair and Lasting Contract.

A successful prenup is one in which both partners feel they've gotten what they need. So even though you have less money doesn't mean you have less say in deciding what the provisions of a prenup will be.

The key, Irving said, is to "focus on fairness (and on) what each person needs to feel well cared for."

Improve your financial security

In fact, a prenup is an opportunity for you to protect yourself financially, not just your high-net-worth honey.

"It can be a way to establish some net worth for the less wealthy person," said Arlene Dubin, author of Prenups for Lovers: A Romantic Guide to Prenuptial Agreements and a partner in the law firm Sonnenschein Nath & Rosenthal.

So take it as an opportunity to negotiate a deal that will make you better off in the long run.

Some couples, for instance, decide that the wealthy partner will pay for all of the living expenses while the earnings of the person with the least money will go exclusively toward building up his or her own nest egg.

Or they may decide upon outright transfers of money either at the start of the marriage, at various periods throughout the marriage or in the event the marriage dissolves or the wealthy spouse dies first, Dubin said.

"Prenups are as varied as people. Everyone has their own style and their breaking points," Irving said. So, it's important that you both respect each other's preferences and limits.

Override state law

But, you figure, why should you make all these decisions now? Besides, aren't there state laws that would give you a fair shake in the event of divorce or death -- or even better than a fair shake?

To the first question, Irving and Dubin both note that you and your partner are more likely to be fair and generous with each other when you're at the prenup stage -- presumably when you're most in love -- than you would be in divorce court.

Or, in the event of your partner's death, there's no guarantee the wealthy spouse's family will want to protect you as much as your partner did.

As for the state protecting you, educate yourself about the laws governing marriage where you live. When you take your vows, "you're saying 'I do' to the laws of the state," Dubin said.

The majority are equitable distribution states, where a court decides what each partner contributed financially to the marriage and in the event of divorce will divide assets accordingly. That may mean the split is far from 50-50. So if one of you is planning to stay home and care for the kids, you might want to establish up front that assets will be split 50-50 in the event of divorce.

What's more, generally speaking, assets brought into the marriage and inheritances received by a partner are not considered joint unless they've been commingled with other marital assets. So if you marry someone wealthy who then doesn't work -- or for some reason can't work -- he or she may not contribute much to the marital asset pool and "you could end up with nothing," Dubin said.

With a prenup, "you're deciding what the two of you want is different than the contract that state law would give you," Irving said.

Get good legal advice

If you both agree a prenuptial agreement is the right decision -- and it's very possible discussions about it will lead to the opposite conclusion -- it's critical you each have your own lawyer representing your interests.

Find ones skilled in negotiation, not prosecution, Dubin advised. And make sure they are well versed not only in marital law but in estate law, too.

If you're going to feel good about it, the process shouldn't be adversarial. "It's not, 'What can I get if things go wrong?" said Irving. "It's a way to build trust (because) you're talking right up front about what's important to you."


Are prenups for you?
5 Tips: Deciding whether to say "I do" to a prenuptial agreement.
June 1, 2005: 4:38 PM EDT
By Gerri Willis, CNN/Money contributing columnist

NEW YORK (CNN/Money) - The wedding bells are ringing. It's June, the busiest month for weddings.

In addition to the last-minute caterer, band and flower details, some couples are squeezing in some other arrangements -- legal ones. That's right, the P word: prenuptials.

Sounds like a downer, right? Negotiating prenups is not very romantic, but with statistics out there that have the divorce rate at 40 to 50 percent you're considered smart for signing one.

Before you say your vows, take today's five tips on whether or not a prenup is a good idea for you.

1. Lose the stereotype.

When you hear the word prenup, you might imagine it's for that mismatched couple. She has a trust fund, diamond earrings bigger than her engagement ring, and a yacht named after her. He grew up on the "other side of town" and put all his savings in her ring. Her father makes the ultimatum, "sign a prenup, then you can marry my daughter."

In another prenup gone too far, Caroline Krauss-Browne, an attorney in the matrimonial department at Blank Rome LLP, related a story about a prenuptial agreement where if the woman gained more than ten pounds during the marriage, her property rights would be cut back. But prenuptial agreements aren't just for the wealthy or the control freaks.

It's a smart idea for other couples too. In a second marriage, it can be the protection your children need to hang onto your property and their inheritance.

Arlene Dubin, a matrimonial lawyer in New York and author of "Prenups for Lovers," says that most states will give your spouse up to half of your estate after you die, leaving your children no say.

Speaking of family business, you might also consider a prenup if one of you has a stake in a family business. People who plan on getting advanced degrees may also want to sign on the dotted line, especially if you plan on specializing in medicine or opening a private practice, which would appreciate during the marriage.

2. Watch your retirement.

Prenuptial agreements aren't just about protecting current assets; they can protect your future too.

Dubin says that many people are surprised that retirement accounts are considered marital assets and are typically divided in case of divorce. These contracts can help couples manage their retirement accounts in a fair way.

In a prenuptial agreement, you and your spouse can also decide to keep your retirement assets separate. If you are not working or plan to leave the workforce, you may want to get a prenuptial agreement that would spell out exactly how much your working spouse will contribute to your retirement account.

3. Get your papers in order.

Financial disclosure is an important part of premarital agreements. It's up to you and your spouse to collect information on your income, debts and assets.

Sharon Sooho of DivorceNet says you should sit down with your accountant or financial planner to figure out exactly what value everything has. Then, sit down with your fiancee and figure out what you want your premarital agreement to do.

Prenuptial agreements can be just as broad or as narrow as the couple decides. Experts recommend that each person get their own lawyer. For those looking for more information, check out the American Bar Association (, the American Academy of Matrimonial Lawyers ( or DivorceNet ( And remember, divorce laws vary across the country, so find out what applies in your state.

4. Procrastinators beware.

This is one wedding detail you'd better not procrastinate about. If the prenuptial agreement is not signed at least 30 days in advance of the wedding, a fiance could claim he or she was pressured to sign the agreement.

The entire prenup process can take up to a few months, so make sure that it's far enough away from the wedding so as to not interfere with the big day. Dubin says that as soon as the "M" word is mentioned, the "P" word should follow.

5. Skip it.

Prenups can cost between $2,000 and $20,000 according to Krauss-Browne. And you may not need to go through the expense of a prenuptial agreement to protect yourself in some cases. In most states, anything you owned before the marriage is separate property as long as you don't actively manage the property.

For example, if you have a bank account in your name and you don't make any deposits or withdrawals or actively manage your accounts during the life of your marriage, your spouse cannot lay claim.

Inheritance and gifts from a third party that you receive as an individual are also your own, provided you do not actively increase its appreciation.

Gerri Willis is a personal finance editor for CNN Business News and the host for Open House. E-mail comments to


Everything you need to know about prenuptial agreements

Nothing can kill romance faster than the word prenup. But with about one in three of all first marriages ending in divorce, and 50 percent of second or third ones hitting the skids, a prenup is smart financial planning, legal and financial experts say.

"Think of it as a business arrangement or as an insurance policy to help remove some of the emotion that's naturally involved," says Nancy Dunnan, a New York City financial adviser and author. "Marriage is not just an emotional and physical union -- it's also a financial union. A prenup and the discussions that go with it can help ensure the financial well-being of the marriage."

A prenuptial accord is a contract between two people about to wed that spells out how assets will be distributed in the event of divorce or death. Such agreements have existed for thousands of years in some form or another, particularly in European and Far Eastern cultures, where royal families have always made provisions for protecting their wealth.

Not just for the rich

You don't have to be a Rockefeller or Trump to need a premarital agreement. A person who has managed to save $30,000 may be more protective of their little nest egg than someone who has millions.

"Those are sometimes the most jealously guarded assets because it has taken a lot of hard work to accumulate a small amount," says Joseph P. Zwack, an Iowa lawyer and author of a best-selling handbook "Premarital Agreements: When, Why and How to Write Them."

You should consider having a prenup if you fall into any of the following categories:

* You have assets such as a home, stock or retirement funds
* Own all or part of a business
* You may be receiving an inheritance
* You have children and/or grandchildren from a previous marriage
* One of you is much wealthier than the other
* One of you will be supporting the other through college
* You have loved ones who need to be taken care of, such as elderly parents
* You have or are pursuing a degree or license in a potentially lucrative profession such as medicine
* You could see a big increase in income because your business is taking off, or that garage band you play in has just gotten a contract with a big record company.

Approaching the subject

So how does one broach this touchy subject? First, do it as early as possible. The mention of a prenup shouldn't come as a surprise if you and your sweetheart have been open with each other as the relationship became serious.

Dunnan recommends couples talk it over before the engagement. "Let your intended know you believe these agreements are important and that you'd like to go over the topic."

Second, the discussion must be honest. "You have to be real candid about why you want the agreement. It's not very romantic, but you have to appreciate what the other party's concerns are," says Michael McDonough, a Palm Beach County, Fla., lawyer who practices matrimonial and family law.

The first step in the prenup process should be to sit down with your sweetie and reach an agreement about what, in general, you want the contract to say. "Draw up your list of assets and talk about it before you hire the lawyers," suggests Zwack. "You won't know the specific laws, but have a concept in mind."

Doing that can save you money. Fees for prenups depend on how long they take to draft. Hourly wages for attorneys can go from $300 to $500 an hour on the East and West coasts. In the Midwest, you might be able to get away with $100 to $125 an hour. Ask your attorney at the first meeting what the anticipated charges will be.

Next, hire separate attorneys. To help ensure an enforceable agreement, both parties need their own lawyers. Many a prenup has been thrown out because an aggrieved spouse did not have legal representation. The attorneys co-write the agreement with their client's best interests in mind.

Signs of a valid prenup

Perhaps the most important ingredient of a solid prenuptial agreement is honesty. Both parties must FULLY disclose their assets. If it turns out either person has hidden something, a judge can toss out the contract.

An ironclad agreement also must be signed well in advance of the wedding. You can't present your honey with a prenup two days before the big day and say, "Uh, by the way, I need your signature on this."

The document should be signed as early before the nuptials as possible to avoid the appearance of coercion, another key reason why some agreements are rendered null and void.

"I recommend at least one month before the wedding and preferably before the invitations have been sent out," says Dunnan. "Then you both have time to back out if you're uncomfortable with the terms. If the discussion revealed such deep and basic differences between two people that they decide not to marry, it's obviously best if all the talks took place well in advanceā€¦ You don't want to have to send back presents!"

A valid prenup also is "fair" and will not leave one of the parties destitute. "No matter what state you're in, the state will look for equity to make sure one spouse is not being taken advantage of," says Zwack.

Prenups can include responsibilities that don't deal with money, but you should avoid making demands that might seem frivolous, such as requiring that your spouse not gain weight, or that he or she quit smoking and take out the garbage three times a week. A judge could look askance upon terms that are less serious than, say, stipulating what religion your children will observe if you and your betrothed are of different faiths.

"It's dangerous to do that, and you're flirting with having the whole thing set aside," warns Zwack.

Following proper legal procedures

Lincoln wrote the Gettysburg Address on the back of an envelope, but if you want that prenup to have legal force, it's best to do things a little more formally.

Without a formal contract, you could end up a lot less rich -- like director Steven Spielberg. His ex-wife, Amy Irving, got half of what he earned during their four-year marriage because their prenup was scribbled on a napkin and she didn't have a lawyer. Her take: $100 million.

Here are a few more tips:

* Use only matrimonial lawyers who are familiar with prenups and the laws of the state in which you will be living.
* Know that you cannot waive rights to child support payments.
* Understand that your spouse's will can't supersede the prenup if the will is stingier. But a will can be more generous than a prenup and leave the widow or widower more than what they agreed to before the marriage.
* Finally, and although it seems obvious, make sure the agreement is in writing and the signing is witnessed by a lawyer. It is recommended the contract be signed in triplicate with the groom- and bride-to-be each getting an original copy, and a third being kept with an independent lawyer, CPA or in a safety deposit box.

Keeping it up to date

Zwack encourages couples with prenups to review them every few years.

After 10 years of marriage, for example, you might want to consider giving your spouse more than the original prenup provided for. "Prenuptial agreements are written defensively," he said, "so after a certain number of years, it's good to be more generous."

One option for softening the blow of a prenup is to add a "sunset clause," which specifies a time at which the contract would expire -- for example, after 10 years of marriage.

"Some people like that idea, others don't," says Dunnan. "However, marriages do end after 10 or 20 years, so review it with your lawyers carefully."

Legal benefits of prenups

Difficult as it may be to talk about money before marriage, doing so can save heartache and hassles in the long run. A prenup can minimize the financial and emotional toll of a divorce. Couples without one will have their assets distributed for them by the state if the marriage ends and they disagree about who should get what.

Without a prenup, assets could end up in the hands of your spouse's children from a previous marriage instead of your own kids, or they could go to a slothful mate who did nothing while you toiled away at a business or book that eventually became a big success.

"If you don't want a divorce court to make the final decision about how your assets will be divided, a prenuptial can protect you," says Dunnan. "Without a prenup you're letting your financial future be determined by a third party."

If you live in one of the nation's nine community property states -- Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin -- the law says property accumulated during the marriage will be divided equally.

In all other "equitable distribution states," assets are divvied according to what the court deems fair. The judge would take into consideration things such as the length of the marriage, whether there are children, and the couple's age, health, job skills and other factors. Alaska is a special case -- it's an equitable distribution state, but it has a law that allows people to voluntarily enter into a community property agreement for certain assets.

Zwack says premarital agreements are a personal decision, but without one couples relinquish not only power over their assets but privacy as well.

"(The courts) shouldn't have to step in and interfere with a husband and wife's private financial affairs," he says.

-- Updated: May 10, 2006


Drafting a Prenup

by Lee Borden

Whether you call it a "prenuptial," "premarital" or "antenuptial" agreement, it's the same thing: an agreement in which a couple sets out the rules that will govern their property, debts, income and expenses. Lawyers love to talk about prenuptial agreements. They keep talking themselves into believing that, eventually, nearly all couples who marry - or at least who remarry after a divorce - will sign one (and pay them a big fee). That's unlikely.

The Basics

Prenuptial agreements sometimes make sense. A prenuptial agreement allows both spouses to protect their separate property. Otherwise, if one of them owns an asset now and sells it after marriage, the cash may become marital property.

A prenuptial agreement also allows both spouses to protect themselves from the other's debts - those incurred before the marriage and those incurred after. And it may allow them to determine what level of support one of them will provide to the other if they divorce or if one of them dies.

Prenuptial agreements can also address situations in which one partner leaves a secure and fulfilling job to live with a geographically distant spouse. If the marriage doesn't work out, is it fair to just send the relocating spouse back home with nothing? Many people would say not. A prenuptial agreement is a good way to provide for that.

On the other hand, a prenuptial agreement also allows the spouses to agree that everything they own and everything they owe will automatically become shared from their wedding day forward, or gradually as they stay married over a period of years. The flexibility of the prenuptial agreement is its main selling point.

Most people don't do them. They may be prudent, but premarital agreements just don't feel good. It feels like you're giving up on your marriage before you even get started. You're asking two people who are thoroughly in love and convinced that this is a marriage made to last forever to, in effect, negotiate their divorce settlement before they say "I do." Any way you dress it up, that's a real downer for romance.

In addition, prenuptial agreements are expensive. Most of us can finish a will without a lawyer. Many of us can complete a divorce without a lawyer, or at least only using a lawyer as a coach. But it's usually necessary to use a lawyer to draw up a prenuptial agreement that will hold up. For both these reasons, prenuptial agreements are rare. They may be getting a little more common, but they're still rare.

Getting Help

In most states, you can only enforce a prenuptial agreement if it's fair at the time you're enforcing it (a tough standard), or if the party you're trying to enforce it against had representation when you negotiated and signed the agreement. As a practical matter, then, most people who negotiate and execute prenuptial agreements are both represented by lawyers. It's rare for a couple to complete their negotiations and sign the agreement for less than $1,500 or so in legal fees, and the cost can run much higher.

Unlike an adversarial divorce, where you're distrustful of your spouse and looking for someone who can protect you against an expected onslaught, you and your intended have a good working trust of each other (if you don't, why are you getting married?), so there's no reason you can't shop for your respective lawyers together. That is, look for lawyers who are comfortable with and trusting of each other, and look for lawyers who are comfortable talking with both of you together.

Lawyers are forbidden to talk to a party who is represented by another lawyer outside that lawyer's presence. However, if all four of you sit down together, there's no reason you can't engage in a free and frank discussion about your options and the risks and rewards of each option for each of you. In this kind of discussion, all four of you - both of you, and your lawyers - are free to speak directly with anyone else in the group.

One thing you might ask a lawyer you're thinking of hiring to draft a prenuptial agreement is "how long is your form ?" If it's a 50-plus-page book, reflect on whether you and your sweetheart want to interrupt your sweet nothings to pore over that much prose. If the lawyer says, "I don't have a form. I'll put it together once I know what you're trying to accomplish," you might wonder whether the lawyer has enough experience with prenuptial agreements to help you get through this.

What's Next?

Any good prenuptial agreement will include a detailed description of the significant property that each of you owns and the significant debts that each of you owes. This is often the most exhausting part of preparing a prenuptial agreement, because it requires so much data gathering from both of you. If you and your intended are contemplating a prenuptial agreement, you can save yourself some time and money down the road if you begin gathering that information now so that it's ready when you start negotiating.

The actual form of the prenuptial agreement can be relatively simple (as few as 5 to 6 pages) or incredibly complex (running on for 100 or more pages). But negotiating the agreement need not be complex. You and your intended can sit down in the same room with your respective lawyers and finish the main negotiations in an afternoon, leaving it to the lawyers to draft the language. Then you could meet for another session in which you complete the fine points of the language and actually sign the agreement.

On the other hand, when the spouses lack basic trust and the lawyers take over, negotiations can run for hours upon hours spread out over months, typically culminating in a marathon negotiation and drafting session on the eve of the wedding rehearsal. Don't laugh. It happens.

Expect some tension. In one sense, the negotiation of a prenuptial agreement allows each of you to see the other at their worst, when you're arguing about money. If you have disagreements, that's okay. If you don't disagree, well, if you don't, that may bode well for your future marriage.

Another option: If you and your new spouse-to-be really aren't going to do the prenuptial thing, there are some practical steps both of you can take to control the way your property, debts, income and expenses merge. First, prepare a thorough inventory of everything you own and everything you owe as of your wedding day. You can do this without even sharing it with your spouse. But if the two of you can cooperate, you could each prepare an inventory and then sign a document indicating that you've each shared this information with your spouse.

Second, to the extent that you want property you acquired before your marriage to remain separate, treat it that way. Don't use it for the benefit of the marriage. If you sell or liquidate any of it, make sure you deposit the proceeds in a separate account in your name only and that you don't use the proceeds for the benefit of the marriage.

If you already know that you're going to use some of your separate property for the benefit of the marriage, go ahead and pull out that much cash and deposit it into an account you can both draw out of, leaving the remainder of the separate property in the original account and preserving its separateness.

As your marriage continues, you may be tempted to tap into your separate property account for expenses of the marriage, like a down payment on a house or an investment in a business. Just realize that every time you tap your separate property for a marital purpose, you make it look more like marital property.

Lee Borden is a lawyer and divorce mediator based in Birmingham, Ala., who loves his work. His Web site,, includes other articles.


Anxieties surface as couple considers tying the knot
by Linda Tucci, Globe Correspondent | May 6, 2007

Aaron Weber has money but is so worried about being broke he can't enjoy himself. His girlfriend, Megan Sullivan, has some debts but wants to enjoy life more.

A couple for four years now, they are considering marriage, but Weber has a case of cold, make that, frozen feet. It's not that Weber, 30, isn't sure he loves Sullivan, 31. It's just he doesn't like how she handles money.

"I want to marry her, but I don't want to marry her debt, and I can't justify spending anything on a wedding when our finances don't make sense at all," Weber stated in his appeal for a Boston Globe Money Makeover.

Sullivan is not exactly the poster child of profligacy. Her most onerous debt is $6,000 on a credit card at 20 percent APR. Weber, meanwhile, has considerable assets -- $100,000 in retirement funds and a $320,000 trust fund, started by his parents when he was born.

"I worry about saying the word 'prenup,' though," Weber wrote. "I mean I'm not a monster."

A monster? Certainly not, said Dana Levit, a fee-only financial planner at Paragon Financial Advisors in Newton who advised the couple. She concluded the condition of their finances didn't warrant nearly so much anxiety from Weber. They do a good job living in an expensive city on modest salaries. Both save for retirement. The issue has more to do with psychology than finances.

"A lot of financial planning is emotional, particularly when couples are first coming together," Levit said. Their financial plan needs to balance Weber's fears about not having enough money with Sullivan's concerns about having her finances constantly scrutinized.

Weber is a technical writer and makes $50,000 a year. Sullivan is a buyer for an independent bookstore in Harvard Square and makes $35,000. They share an apartment near Davis Square in Somerville.

Weber wears his anxieties on his sleeve. "I'm always terrified about money, that something is going to go wrong, that I bought the wrong thing, that I spent too much," Weber said.

For example, in February the couple went on vacation in Miami after Sullivan found a deal on tickets. "It was beautiful and sunny," Weber recalls, "but every time I turned around somebody was reaching out for money -- $14 for a cocktail!

"I feel like such a jerk. I mean what kind of jerk can't live on $85,000 a year?" he said.

Plenty, it turns out. "It is really hard for a couple to live in Boston for less than $100,000, so it is not surprising to me you're struggling," Levit said. With the rent on their apartment at $1,250 a month, the couple spends 43 percent of their budget on housing -- above conventional amounts.

But one other reason money seems so tight is that they are "doing such a good job at saving," Levit says. Sullivan puts away $60 a month for retirement; Weber, about 20 percent of his salary.

The couple also lives within its means. They take home $56,000 and spend $55,000, a "phenomenal accomplishment," Levit said. Even their financial goals turn out to match: Both want to know whether they can afford to buy a house; plan a wedding; and pay off her debt.

As for the cushion Weber's trust provides: "I try not to look at it or think about it," he said. "It's family money. I try to regard that as just extra good luck, and I want to be able to do this without that, because it doesn't seem real to me."

"But what is the money for?" says Sullivan , who gamely joined Weber for the financial counseling.

"What happens when we get old? Do we start spending it then, or is this always going to be, 'You never want to look at it, so we die, and then what happens, the cats get it?' "

Levit laid out a financial plan to soothe these competing concerns. They should maintain two levels of emergency funds for short term-cash needs: 10 percent of gross income in a high-interest savings account, and another 20 percent in a retirement account. Level I is more than taken care of with Weber's high-earning $25,000 money market account. They should build up level II.

Long term, Weber and Sullivan will need $1.1 million to maintain their current lifestyle in retirement. They are way ahead there. And as for a house, the only mortgage they can afford is $210,000 for 30 years at 6 percent. No Davis Square loft for them, just yet. To buy something for $300,000 would require Weber to contribute $90,000 from his trust funds.

It's tough for young couples to come to terms with their money, especially when one brings more of it to the table than the other, Levit said. Higher earners may feel as if they're being taken advantage of. Lower earners may feel as if their spending is being judged. Weber and Sullivan could evenly split living expenses, but instead they choose to contribute a percentage of salary to the joint expenses. So, neither should feel bad. They could also designate "judgment-free cash" -- money either could spend without being questioned.

It's also tough to deal with family money, she said: Guilt, embarrassment, ambivalence -- family money can do a number on people. How to come to terms? Well, he can accept the gift and "reframe it," maybe use it do something he wouldn't do otherwise. Or he can put it toward a house, a wedding, or "pay it forward"; that is, pledge to be generous in the future to someone else.

Given Weber's aversion to risk, Levit was surprised his investment portfolio was made up of roughly 95 percent equities -- and over 60 percent of that in individual stocks. She suggested moving some into more conservative investments.

And regarding that monstrous prenup, she advises all her clients to have one: "It's better to essentially write your own divorce when you like each other."

A week later, Weber e-mailed a thank-you note to Levit, reporting that he had rebalanced his retirement account and decided to take another suggestion : Loan Sullivan money to pay off the credit card all at once. "We left reassured that we're saving enough money for retirement, but also realizing that we've been handling money like roommates instead of as a family."

Copyright 2007 Globe Newspaper Company.


Prenups Should Cover These Items
by Jeffrey Lalloway - Attorney-at-Law
Irvine, California 92612

If you have smartly decided to get a prenuptial agreement before you marry, there are many areas you may want to cover. You can cover as few or as many of the items as you want. Some of the items may not be relevant to your situation. Be sure that if you follow the list, you will cover most of the key issues.

1. Decide how all of your debts will be handled. This includes those debts incurred before you are married and those incurred after you are married.

2. Make sure you disclose all of your assets, liabilities, sources of income, and any other potential future assets, such as gifts or inheritances.

3. Should you divorce or die, decide who will get your primary residence or any vacation homes.

4. Determine what will happen to any assets or property you bring to your marriage. Normally, this will be separate property. But you need to agree with your soon-to-be, what will happen to any post-marriage appreciation, earnings, or proceeds of that property.

5.Figure out what will happen, if you divorce or die, to any assets or property you acquire after you get married.

6. Clearly state what will happen to each specific type of property, either community or separate. For example, real estate, antiques, jewelry, stock options, and accident settlements.

7. Determine the status of any gifts or bequests you receive, either before or after marriage. These should be separate property, but questions may arise when a gift is given to a couple after marriage. A good example is a gift by one spouse's parents of a down payment on a house. Is that a gift to the couple or just to their child.

8. Although any provision for child support won't be binding later, you can provide for spousal support (alimony) in your prenup. Understand what is reasonable for both the payor and the receiving spouse.

9. Set forth the beneficiary of all retirement plans (e.g. 401(k)s, pensions, IRAs) in the event of your death. Also, clarify how the plans will be divided upon divorce.

10. Clarify who will provide health insurance for your children and how the costs will be shared.

11.Clearly state what state's laws will apply and how a move to another state will affect the prenup.

13.Make sure your attorneys are identified. Have them explain each provision in the prenuptial agreement and try your best to understand what it all means. Don't be afraid to ask questions. Agree upon what happens to your pets in the event of your divorce. Who gets custody and will there be visitation rights?

14.Include a clause that requires the one who challenges the validity of the prenup to pay all of the other spouse's fees, regardless of the outcome. You can also make the challenger give up something of value they might be getting under the prenup.


Provisions that can be added in a Prenuptial Agreement

Many people have the false belief that prenups are only used by famous people or people who have a large amount of money. That simply isn't the case. Anyone who is planning to get married or be joined in a civil union can have a prenup and many people believe anyone in either situation should have one. The provisions added to a prenuptial agreement will really depend on the individual circumstances of each couple entering into the contract. Prenups are a way for people to protect themselves and each other in the event that the marriage ends in divorce or one spouse passes away. There are hundreds of reasons why people feel the need to have a prenuptial agreement including financial protection and even avoiding future disagreements during marriage or civil union. Listed below are some of the common provisions that are added into prenuptial agreements:

* Protection from Debt: If there is no prenup in a marriage creditors can not only come after the other spouse to be repaid they can also go after the marital or community property of the couple. Not being protected from a spouses debt can also ruin the other spouses credit. Adding a provision protecting one other spouse from any present or future debts the other may incur is a common addition to many prenuptial agreements.

* Division of Finances: If a couple divorces or one happens to die then the community and marital assets are divided up by the court system. A prenup can allow couples the right to keep their own individual assets in the event of a divorce or the death of one spouse instead of having the court make those divisions.

* Who Gets What In A Divorce? In divorces where there is no prenup in place the law in the state where the couple is divorcing dictates how things are divided. Prenups allow couples to decide ahead of time how marital assets will be divided between them in the event of a divorce. It can also in many states determine whether or not alimony will be paid to one or both spouses. Deciding these types of things ahead of time not only allows couples to make their own decisions about who gets what it can also help to avoid any bitter fights over property if the couple gets divorced.

* Partner Responsibilities During Marriage: Prenups can also have provisions for certain responsibilities and expectations of everyday things such as: whether the couple will have joint or separate bank accounts, if they will file joint of separate tax returns, who is responsible for making sure the bills are paid, how credit cards will be used, agreements to support the other financially in certain times such as during college, if the spouse will be named as beneficiary of a life insurance policy, or agreements on how money will be saved and invested.

* Protecting Children: People often use prenups to protect and ensure children they have from previous marriages or relationships get their inheritance. One or both spouses can agree in a prenup that they give up their right to claim the others property in the event of death in exchange for other agreed upon property so that the child or the children inherit their intended property.

* Family Property: Prenups allow individuals to keep property such as heirlooms, or shares in a family business in their birth family. Prenups can also be used to protect one party's future inheritances as well as gifts one spouse receives during the time of marriage.

* Non Monetary Value: Prenuptial agreements can also determine the value of non financial contributions to a marriage such as career sacrifices or a stay at home spouse.

* Non Financial Agreements: Non financial provisions are not allowed in some states and they are often debated by legal experts as to whether they should even be permitted in a prenup. Examples of non financial agreements are agreements that neither spouse will commit adultery, one or both spouses will refrain from drinking, smoking, or gambling, how household chores will be performed as well as by who, and even how many children the couple will have.


Is the Focus on Prenups Destroying Families?

A recent study reveals that there is a better way of managing marital risks, than focusing on signing a prenup. A prenup threatens the permanency of a marriage. The missing quality knowledge and advice you've always wanted to know is now available.

Chicago, IL, (PRWEB) July 18, 2006 -- Due to the high rate of marital failure, many financial planners and lawyers are advising their clients to better secure the assets they acquired while single, than to risk losing them if they marry the wrong husband or wife, and need a divorce later. The result? It is now becoming trendy to sign a prenup to spell out how your assets will be split in case you divorce in the future. However, a recent study is revealing that putting your focus on signing a prenup is not the best strategy if your goal is to build a joyful family. Here is why:

If both husband and wife are ideal for each other, and they agree to the mutual needs of safeguarding against financial loss, then a prenup becomes a source of peace of mind to benefit both parties. And this was especially true in circumstances where there is children's property from the previous marriage, or where one had inherited assets with conditions that would be affected by a divorce. In such special circumstances, a legal contract spelling out this (third party protection) is the right thing to do.

In most circumstances however, many justify the need of a prenup because they believe that success in choosing and keeping a true lover is a matter of luck, and that divorce is just an accident! Sadly, this false belief has created fear, and more people today are only focusing on protecting their wealth, on the suspicious assumption that their fiance(e) could be another gold digger. Many good men and women now think that their fiance(e) is out to get them, and all these negative beliefs and false assumptions are truly destroying many families and communities. No wonder, this study shows that a prenup indeed protects the money, but it also programs the mind for failure. Below are some of the unpleasant consequences experienced by the interviewed prenup users:

This study found that the partner with fewer assets was always left wondering which of the two agreements is more believable! Was it the trial commitment preceded with a prenup, or a total commitment involving marital vows promising to forever be one as a family? Here is the actual tight spot for the partner with less: On one hand you have jointly become one in the traditional spirit of family, but on the other hand you do not want to be a party to your spouse's liabilities or problems, and s/he is not taking your 401k, your home, your assets, or your heart if you divorce in the future.

During this study, one prenup user who quit the relationship asked the author these hard-hitting questions: "How confident would you feel in a marriage where you are not trusted? How would you feel if your spouse thought you were a gold digger waiting to divorce in the future? How joyful would you be in such a 'love' relationship where you are undervalued?" Simply stated, they had contradicting needs and expectations from their marriage; the wife wanted true love, and the husband wanted to protect his assets from his wife. And later, when the husband suggested that they should get a baby, the wife asked him, "So how much will you pay me for carrying your child?" The prenup had sent the wrong signal, threatening the permanency of their marriage. The evidence is in writing for you to study everything you need to know.

Now, here is the good news: There is a solution to this challenge. This study revealed that there is a smarter way of managing marital risks, than transferring all the risks to the spouse with fewer assets. And the smarter way is to acquire the right knowledge to protect not only your money, but the core of your family's peace of mind and quality of life. No one should ever come out feeling like a loser. There is no reason to stay in denial. The quality knowledge and advice which has been missing is now available in one package to help you in choosing and keeping your true lifetime lover.

The major breakthrough news about this study was that it revealed the existence of a clear path that leads to a lasting and successful love relationship. Best of all, this study also developed the first indispensable decision-making tool that guides you to foresee and manage the risks and uncertainties in choosing your true lifetime lover from the millions of singles out there. Furthermore, this study proved that marriage is all predictable, and anyone can learn to make decisions that stand the test of time.

Now for the first time, anyone can gain the deep understanding needed to build a strong and lasting love relationship. You do not have to be an expert, and you do not need to settle for the 50/50 guesses. It's been simplified; anyone interested can confidently grow a rich and fulfilling love relationship. All this life-shaping wisdom is in a new #1 How-To workbook titled, 10 Steps to Success in Love and Marriage, by Alex Mugume.

The 10 Steps to Success in Love and Marriage is one of the best resource books for the high achievers who desire to master how to build a joyful family. You'll learn how to avoid the common marital mistakes, gain the essential dating skills to foresee and create your desired marital destiny, and most importantly, discover the 15 success mindsets to enable you to become a better spouse and live a truly satisfying love life.

About the Author

Alex Mugume is a love teacher and author of 10 Steps to Success in Love and Marriage, How to Choose Your True Lifetime Lover, and How to Keep Your Lover Successfully. He is on a mission to share the understanding needed to build more joyful families, and make divorce and domestic violence plagues of the past. He is available for teaching engagements and personal consultations. More useful info is available at

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This page was last revised on May 25, 2007.

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