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4 PRENUPTIAL AGREEMENTSIn the pages that follow, we take you step by step through the processof making a prenuptial agreement, from deciding whether to haveone to preparing a final written agreement that is customized toyour situation and designed to stand the test of time. Along the way, weprovide worksheets to help you assess your finances and goals. We alsoinclude sample clauses that you can tailor to meet your needs. When it’stime to put your prenup together, you can use the resources that you’llfind on the book’s online companion page (see Appendix A).To help you see how this works for actual people, we follow threecouples through the entire process. You’ll meet Ted and Grace, Karenand Russ, and Steven and Freda—though these aren’t their real names.You’ll have a chance to see how they deal with each stage as they cometo it, and you’ll be able to read selected parts of the agreement eachcouple signs. In addition, there are a host of other fictional couples whomake cameo appearances to illustrate particular points that may arise asyou negotiate and draft your agreement.In this chapter, we’ll show you how prenups work and what youcan accomplish by preparing one. We’ll also introduce you to each ofthe steps you’ll need to take to make your own prenup. Before you getstarted, however, we’d like you to consider a few points we consideressential to making a responsible, legally valid agreement.Other Names for PrenupsIn some states, a prenuptial agreement is known as an “antenuptialagreement,” or in more modern terms, as a “premarital agreement.”Sometimes the word “contract” is substituted for “agreement,” as in“prenuptial contract.” For the sake of brevity, we’ll stick with “prenup”in this book, but occasionally you’ll find us using one of the other termsif it’s appropriate.

CHAPTER 1 A PRENUP PRIMER 5Our AssumptionsWe have written this book with a distinct—and firmly held—point ofview on the subject of prenuptial agreements. In the interest of full andfair disclosure, we want you to know up front just how we view thissubject.We think that a prenuptial agreement is more than just a legally binding contract. It is the material and financial counterpart to wedding vows.When you marry, you make what you expect and hope will be alifetime commitment to be there for each other in every way. Yourprenup should support and reflect the spirit of partnership with whichyou approach your wedding vows.Prenups aren’t always negotiated in this spirit, but we believe theyshould be. Not only that, we think this is the best way to ensure that aprenup will be binding in court, should a serious dispute ever arise.This means we’re making certain assumptions about how you willapproach your prenup. They are: You want to be fair. You are prepared to make full disclosure about your property andfinances. You are willing to communicate about finances. You’ll each work with a lawyer.Let’s look at each of these assumptions more closely.You Want to Be FairForgive us for stating the obvious. Of course you want to be fair.However, there is often more to “fairness” than meets the eye.In our view, a prenuptial agreement is fair if it meets two criteria: fair terms—that is, what you agree to benefits both of you (it’s notone-sided), and fair process—meaning that you negotiate the agreement fairly (youdon’t subject each other to undue pressure or coercion).As for the first of these criteria, it will be up to the two of you todecide what’s fair and what’s not. In fact, you may discover that each

6 PRENUPTIAL AGREEMENTSof you has a different view on what’s best in your situation. It may takesome talking and a little compromising to come up with an agreementthat seems fair to both of you, but we think you’ll find that it’s wellworth the effort.Having a fair process means taking the time to make sure that bothof you participate in making the agreement and that neither of you feelspressured into signing an agreement you’re not comfortable with. Fairprocess is the basis for the rest of our assumptions.A prenup that meets both criteria of the fairness test—its terms areequitable and you’ve mutually negotiated it—is most likely to standthe test of time in your marriage. An agreement that fails the fairnesstest will at best be a reminder of an unpleasant experience that you putaway and hope to forget about. At worst, it may erode the trust betweenyou and your betrothed, and it could even be the source of bitter andexpensive court battles in a later divorce.On the legal front, courts in most states will not enforce prenupsfound to be unfair in one or both aspects. So paying attention to fairnessalso makes it more likely that a court will enforce your premaritalagreement, if it comes to that. As you use this book, you’ll learn how toprepare an agreement that’s fair.CAUTIONA premarital agreement is a binding legal document. It’s truethat some prenups get thrown out of court because of some legal defect, butthat doesn’t mean yours will be. If you have reservations about a proposedagreement, don’t sign it with the hope that you can get out of it later. Younever know exactly what a particular court or judge might do.You’re Prepared to Make Full DisclosureOur second assumption is closely related to the first. A premaritalagreement is most likely to be viewed as fair—by you and by thecourts—if it is based upon complete and accurate financial information.This means that you should both disclose everything you own (including

CHAPTER 1 A PRENUP PRIMER 7approximate values) and all of your debts (including any obligationsfrom a prior marriage, such as child support or alimony). We are notalone in considering full disclosure basic to fairness. Virtually every staterequires that any premarital agreement be accompanied by completewritten disclosure of both parties’ financial circumstances.As you work with this book, we’ll help you figure out exactly whatyou own and what you owe. We’ll also give you detailed information tohelp you prepare the written financial disclosures that will accompanyyour prenup.You’re Willing to Communicate About FinancesLet’s face it: Although most of us marry for love rather than money,marriage is a financial partnership as well as a spiritual, emotional, andphysical union. Sooner or later, the two of you will need a workableunderstanding about how to handle your finances, even if it’s just dayto-day stuff like whether to have a joint bank account or who will paythe bills. This means that you’ll want to be able to communicate wellabout money and finances.If you intend to sign a premarital agreement, good communicationabout finances is not just desirable, it’s essential—before you sign. Ifyour communications aren’t clear, it will be next to impossible to comeup with a written document that truly represents a mutually negotiatedagreement between the two of you.Bringing up the topic of money can be hard. Having a sustainedconversation about it is even more difficult. At a time when romance ison your minds, talking about money can feel out of place. And just thethought of disagreeing can be enough to make you avoid the subject.Maybe it feels awkward to discuss old debts when you’re in the processof clearing them up and you’re confident that they’ll soon be ancienthistory. Or maybe it’s your fiancé who has the outstanding debts andyou hesitate to bring up an embarrassing subject.Whatever the reasons, money and finances can be a difficult topic formany of us to broach. If this is true for you and your betrothed, don’tbe alarmed, but don’t let it be an excuse to delay the inevitable, either.

8 PRENUPTIAL AGREEMENTSStraight talk between you is essential—the sooner the better. If you needhelp, we provide lots of tips on how to have good conversations aboutmoney, plus guidance on working with financial counselors, mediators,or other advisers.You’ll Each Work With a LawyerIf you want to end up with a clear and binding premarital agreement,you should get help from a good lawyer. In fact, you will need twolawyers—one for each of you. That may sound surprising in a self-helplegal book, but it’s true. Here’s why.As we’ll discuss in the next section, our Anglo-American legal systemviews marriage as a matter of contract between two consenting adults.The terms of the “marriage contract” are dictated by the laws of the statewhere the married people live, unless they have a premarital agreementcontaining different terms.The laws governing marriage contracts vary tremendously from stateto state. In this book, we provide some general information on eachstate’s laws relating to marriage and prenups, and we give you sometips on doing your own legal research. (See Chapter 4.) However, if youdon’t want to invest your time learning the ins and outs of your state’smatrimonial laws, a lawyer who knows the intricacies of those laws will bean important resource. The lawyer can help you put together an agreementthat meets state requirements and says what you want it to say.This explains the desirability of having one lawyer, but why two?That’s because prenuptial agreements are still scrutinized by the courts,sometimes very closely. If you want your agreement to pass muster,having an independent lawyer advise each of you can be critical. Whilemost states don’t require that each party to a prenup have a lawyer, theabsence of separate independent advice for each party is always a red flagto a judge. On a practical note, having separate legal advisers can helpyou and your fiancé craft a lasting agreement that you both understandand that doesn’t leave either of you feeling that you’ve been takenadvantage of.

CHAPTER 1 A PRENUP PRIMER 9That said, it’s best not to ask your lawyers to start writing up a draft orfinal agreement until the two of you have agreed on its essential terms.You should also put those terms in writing—either in a written outlineor a draft agreement created using the clauses in this book. A prenupprepared by a lawyer who isn’t working from terms you’ve both agreedon is likely to be one-sided and adversarial. If you provide your lawyerswith an outline or draft prepared by both of you, the whole process—and the final document—will be more balanced.All of this assumes that you select and use lawyers who are not onlycompetent and experienced in matrimonial law but who are also capableof supporting the two of you in negotiating and writing up a loving, clear,and fair agreement. You also don’t want to spend a fortune on lawyersdoing background work you could handle yourselves. Finding the rightlawyers can take some time, but it’s worth the effort. This book gives yousome suggestions on how to find and work with good lawyers in a waythat both cuts your costs and supports your relationship. (See Chapter 7.)How Prenups WorkPeople have been making prenuptial agreements for thousands of years.Scholars tell us that the practice dates back to the ancient Egyptians,and that prenups have existed for many centuries in Anglo-Americantradition. In previous times, the parents of the bride and groom negotiatedthe agreement on the new couple’s behalf. These days, engaged couplesdo their own negotiating, although family members often exert influencebehind the scenes (especially if family money is involved).Contrary to popular opinion, prenups are not just for the rich. Whileprenups are often used to protect the assets of a wealthy fiancé, couplesof more modest means are increasingly turning to them for th

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