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Thursday, March 7, 2013

Prenups: THE To-Do Before I Do

Spring is in the air!!!  Allergies and prenups abound.  I was recently interviewed by Aisle Magazine, a digital wedding magazine which celebrated its launch this week in San Francisco about premarital agreements.   (Congrats, Aisle!)

To see the rest of my interview, you can download the iPad app here

Don't RUSH a prenup.  Frequently, I receive phone calls from clients wanting prenuptial agreements.   It usually goes like this.  "My fiance just gave me a prenup, and I want changes.  Today is Monday and our wedding is on Saturday.  Help me".

Me:  "It's too late!  Sorry!"  

End of phone call.  

California Family Code section 1615 (c)(2) clearly states that "It shall be deemed that a premarital agreement was not executed voluntarily unless the court finds in writing or on the record all of the following: THE PARTY AGAINST WHOM ENFORCEMENT IS SOUGHT HAD NOT LESS THAN SEVEN (7) CALENDAR DAYS BETWEEN TIME THE PARTY WAS FIRST PRESENTED WITH THE AGREEMENT AND ADVISED TO SEEK INDEPENDENT LEGAL COUNSEL AND THE TIME THE AGREEMENT WAS SIGNED.

Obviously, this can be interpreted in several ways. I tend to be very protective of my clients, so my policy is that the FINAL AGREEMENT must be presented and accepted as final by all parties, then a waiting period of 7 days, AND THEN signatures. The signature may even occur on the date of the wedding, but to be safe, I recommend one week. This means, you should leave yourself AT LEAST two (2) weeks prior to the wedding to have a finalized agreement.

THIS MEANS you need to hire an attorney AT LEAST 4 -6 weeks prior to your wedding, so the planning, drafting, and negotiating can take place.

If you are planning a wedding, you need to make your premarital agreement part of the process. It is THE TO-DO on your list of to-do's.

The client was not happy with me.  I also told her that the good news is - the prenup is NO good.  Beware of attorneys out there who will draft a prenup 5 days prior to the wedding. You may as well do it yourself on a piece of toilet paper, and then flush it.

If you want to learn more about premarital agreements, please read my highly-informative article, Premarital Agreement – Frequently Asked Questions.  (attached here!)


Congratulations on your upcoming nuptials!

Should you get a prenup?  The answer in most cases is yes.  A prenuptial agreement is similar to car insurance.  No one anticipates an accident or a divorce.  We certainly don’t like thinking or talking about it.  But, it happens, and it’s important to be prepared.  I have prepared a list of frequently asked questions, collected from my clients.  They should help you understand the very basics of premarital agreements.  Please note that I practice in California, and if you have state-specific questions, you should contact a competent attorney in your state.

1.                 I am getting married. I want to explore the possibility of getting a prenup, but I don't want to insult my future spouse. How should I go about this topic?
It is tough to rid the stigma of a "pre-nup". You hear in rap songs. Donald Trump never marries without one. It signifies a certain je-ne-sais-quoi that most people shun. However, in this century, I advise my clients of the following: Prenups are like car and life insurance. No one likes to think about sudden or accidental death. But it happens, just like divorce. Prenups are similar to insurance. Though it may not protect you from all problems - however, if properly drafted, it will certainly limit them.

In addition, you should inform your future spouse that prenups which "promote" divorce are unenforceable. You should speak with competent counsel for information on what "promotes" divorce.

Finally, marriage is a legal union of two people. The characterization and distribution of assets and debts are indispensable parts of this beautiful legal equation. That's something worth discussing, and finalizing on paper, isn't it?

2.                 What is the point of having a prenuptial agreement?
This is a fairly complicated question, but I will try to simplify it with my three P's:
Protection of property. This includes waiving community property rights, including real property, businesses, intellectual property, and retirement plans.
Providing of (or not) spousal support. You can opt to waive spousal support (alimony).
Preservation of separate property and debt. Making sure what was yours is always yours. Making sure what he/she owes is always his/her debt.

3.                 What can go into the prenup?
A lot of things. Under the Family Code, you can include the following:

(1) The rights and obligations of each of the parties in any of the property of either or both of them whenever and wherever acquired or located;
(2) The right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property;
(3) The disposition of property upon separation, marital dissolution, death, or the occurrence or nonoccurrence of any other event;
(4) The making of a will, trust, or other arrangement to carry out the provisions of the agreement;
(5) The ownership rights in and disposition of the death benefit from a life insurance policy;
(6) The choice of law governing the construction of the agreement;
(7) Any other matter, including their personal rights and obligations, not in violation of public policy or a statute imposing a criminal penalty.

4.                 What can't go into the prenup?
Limitations on child support. Custody. Religion. Promotion of Divorce. Damages for cheating.
Technically, you can put these provisions in the prenup. But they are unenforceable, so what is the point?

5.                 Is there a deadline for entering into a prenup?
Yes. There is a seven (7) calendar day rule. Ask your attorney.

6.                 What is a post-nup?
Just like it sounds, a post-nup is an agreement entered into after the marriage has happened.

7.                 Why would I get a post-nup?
Same reasons. The three (3) P's above. The difference between a pre-nup and a post-nup is a marriage in between. This is significant because marriage imposes strict fiduciary requirements on spouses. As such, post-nups will be more carefully scrutinized and easily challenged then pre-nups. It is of utmost importance that you hire an attorney to prepare a post-nup for you.

8.                 I am interested in learning more about the law, and I don't want to pay a lawyer. Where can I be educated?
I recommend reading Family Code sections 1600 et seq., also known as the Uniform Premarital Agreement Act. I find it very interesting.  I also recommend a book written by attorney Arlene J. Dubin entitled, “Prenups for Lovers”.

9.                 Do we need lawyers to do a prenup?
Yes, and make sure they are competent lawyers. Remember the first rule: You get what you pay for. Also, please note that if you are including provisions waiving spousal support, you will need to have counsel. Ask your lawyer.

10.              Ok. I guess I'll get a prenup. How much do you charge?
$10,000.  Wait, that is my standard retainer for a divorce case.  For prenups, my office currently charges between $2,500- $5,000, and that depends on your situation.

Kelly Chang Rickert founded the Law Offices of Kelly Chang, A Professional Law Corporation. (www.purposedrivenlawyers.com). Her firm specializes in Divorce and Family Law, and handles all areas of Divorce, Annulment, Spousal Support, Child Support; Modification, Child Custody and Visitation, Prenuptial and Postnuptial greements, Adoptions, Property Division; Restraining Orders; and Family Law Mediation.  She is happily married to the love of her life, and has a premarital agreement.