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When to Sign a Prenup
And why you might actually want one.

By Minda Zetlin

When I met Javier, I thought I'd finally found the ideal man.  He was bright, funny, gorgeous, and best of all, passionate about me.  Six weeks later, he proposed, and although it seemed a little soon, I started planning the wedding.

Our finances presented some complications, however.  He hinted at vast wealth from his South American family's business but declined to provide any details.  I had a little inherited money I depended on to supplement my income as a writer.  I also owned my apartment, which I wanted to keep in my name.  Under the circumstances, my lawyer advised, we should have a prenuptial agreement.

"What's Mine Is Mine"

The prenup is a contract entered into before the wedding that determines how assets will be distributed in case of divorce.  With couples marrying later and two-career mariages now the norm, prenups are proliferating; at least 5 percent of brides and groom sign them.  Most common reasons: (1) there are children from an earlier relationship; (2) one person is part owner of a business and the other owners don't want the spouse's lawyers nosing around the books; (3) either partner has assets he or she does not want to share.

Negotiating our prenup was a supreme pain--even though we agreed to keep our finances separate.  The problem was the unromantic dealings involved: Javier had to find his own lawyer and I wasn't allowed to help, as that might look like undue influence.  Eventually, he selected someone from the yellow pages, and the two lawyers started picking over details, which led to bickering between Javier and me.

"Is this really necessary?" I kept asking.  My lawyer insisted it was; three days before we were married, we finally signed.

Looking back now, I think: Thank God!  It wasn't long before I found that Javier had lied: He was totally broke.  Then, when I decided to leave him, he did his best to stop me, wrangling in court for nearly a year over grounds and over who should be divorcing whom.  At least there were no property questions to fight over; our prenup covered them all.  The one delaying tactic he didn't try was overturning the agreement.

Devious Spouses

In general, prenuptial agreements are more likely than any other kind of contract to be questioned later, usually with claims of undue influence.  The success of these challenges varies from state to state: Some have enacted laws recognizing the validity of a properly drawn prenuptial, while others frown on them.  Connecticut courts, in particular, are known for overturning these agreements, and most states will not uphold a contract if its provisions are obviously unfair.

However, because prenuptials are now more common--and because a few have landed in the headlines--they are becoming more durable.  "People still come in and say, 'I didn't understand what I was signing,' but it's getting harder to make that claim, says Stanford Lotwin, a partner at Tenzer Greenblatt LLP, whose clients include Joan Lunden and Donald Trump.

The contract must be properly drawn, of course, and each side must have legal representation, full information about the other's finances, and plenty of time to think before signing.  A prenup is much less likely to survive if one spouse pulled a fast one on the other, but many people try this anyway--like the well-known actor who handed his bride-to-be their agreement while the two were in a motor launch on the way to their seaside wedding.

"The signatures were wavy because of the movement of the boat," Lotwin says.  Called in to represent the actor during the divorce, he took one look and told his client that trying to defend the document would be a waste of time.

Then there was John Rudbeck, who asked his fiancee to sign a prenup but neglected to tell her about his lucrative real estate holdings.  "It was a classic example of a husband trying to mislead his wife," recalls Edward L. Winer, a partner at Moss & Barnett in Minneapolis, who represented Carol Rudbeck when she challenged the agreement during divorce proceedings.  Asked if he'd made a full and honest disclosure of his assets, Rudbeck replied: "There was stuff lying all over my desk.  She must have seen it."  Then he presented court with a document in which his wife gave him her half of one of the properties.  Carol Rudbeck swore she'd never signed it, and a handwriting expert testified that what appeared to be her signature was actually a tracing.  In view of the evidence, the court nullified the prenup and awarded her half the couple's assets, plus monthly maintenance for two years while she trained for a job.

Prenup vs. Previous Wife

The "moneyed" partner is usually the one who asks for a prenup--and most of the time, that's the groom.  But these days, more and more brides are seeking them too.  One matrimonial attorney was asked to give a talk at a recent bridal show, and many women in the audience became pro-prenup on the spot.

But not always for the reasons you'd expect.  Sally,* a Houston dentist, decided she needed a prenup when she married Joe, a college professor who made less than half what she did.  The problem was Joe's first wife, who had custody of their five-year-old son.  Texas is a community-property state, and under its laws at that time, Sally's earnings were vulnerable to a suit for additional child support.

"Sure enough, six months after the marriage, my ex filed a motion to increase child support based on my new wife's income," Joe says.  He immediately offered a more modest increase based on raises he himself had gotten, but his ex refused.

At his deposition, Joe produced information about his own income, but not Sally's--which infuriated his ex-wife's lawyer.  "It took several repetitions of 'We keep our incomes separate' before she caught on," he says.  He produced the prenup as proof, and the deposition ended abruptly.

Preventive Medicine

Sometimes, a prenup can even protect the less affluent partner.  "I represented a woman whose fiance wanted her to quit her job, move to his state, and stay home and raise their children," Winer recalls.  "She was willing to do that, but since she was going to give up her career, she wanted to make certain that if they divorced or he died, she would be taken care of.  Her husband-to-be refused to share any of his assets, however, and eventually the wedding was called off."

As this story illustrates, prenups can be paradoxical: Sometimes the negotiations themselves lead to broken engagements.  "The're not supposed to be anti-nuptial agreements," Winer says, "but look at it this way: We are preventing a divorce rather than obstructing a marriage."

Should You Ask Him to Sign?

The answer is yes if you need or want to do any of the following:

1.  Protect your business from scrutiny.  If you own or are partner in a company or think you might be someday, your husband's lawyer will have the right to examine the firm's books should the two of you divorce.  A prenup may allow you to prevent this.

2.  Protect your future earnings.  Are you getting a medical degree or an MBA?  Are you in a high-paying job or in line for one?  Most states would give your husband a claim to part of your earnings unless you have an agreement that stipulates otherwise.

3.  Protect your right to his future earnings.  What if you help your husband finish medical school, say, and then, degree in hand, he leaves you?  New York considers the earning potential of an advanced degree as a marital asset, but most other states do not.  A prenup could give you the right to a settlement in this situation.

4.  Be compensated for giving up a good job.  Joan left a $120,000-a-year position to relocate to her new husband's town.  After six months, he wanted a divorce, but she couldn't get her old job back.  Desperate, she refused to move out until her husband offered her a decent settlement, which he eventually did.  A better idea would have been to start out with an agreement that specified a settlement. 

5.  Keep what's already yours.  I emptied my savings account to make the down payment on my apartment, and I wasn't about to let anyone else have it.  But since I was paying the mortgage with money earned while we were together, my ex might have had a claim if we hadn't signed a prenup.

6.  Be protected from your husband's creditors.  Does your spouse-to-be have any debts or other financial obligations, such as child support?  His liabilities could become yours too, without the protection of a prenup.

7.  Safeguard or reassure offspring.  If either of you has children from a previous relationship, you'll want to make sure their interests are protected.  A prenup can do this--though sometimes it makes as much sense to transfer assets to the children or into a trust fund for them.  (Any of these measures may make it easier for them to welcome a new stepparent.)

8.  Protect an inheritance.  Though many states consider bequests nonmarital property, people who have or may receive inherited wealth often use prenups to make it clear exactly which assets are theirs alone.

9.  Write the will you want.  You probably haven't thought much about who gets what after you die, but most states give spouses very specific inheritance rights.  If you think you might want to leave a substantial portion of your assets to someone other than your husband, a prenup can allow you to do this.

10.  Expedite matters in case of a divorce.  With about half of all American marriages ending this way, it's smart to consider the possibility.  Many couples settle property questions and sign prenups to keep a possible future split simple.

*In the interest of privacy, some names have been changed.

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