From time to time I get calls from people who are about to get married and want a pre-marital agreement, also known as a “prenup.” I send them on to braver lawyers.
That said, here are some things to know about prenups.
First, there are some subjects that a prenup won’t cover, or at least won’t be enforceable if there is a divorce. One time a young Marine private called me and asked me to draft a prenup in which his fiancée would agree to give up her employment as a stripper. I told him to reconsider the marriage. More commonly, you can’t enter into a prenup that covers child custody or child support, attempts to confer divorce jurisdiction on a court that doesn’t have it, and other crazy things. Basically, a prenup should cover two subjects: alimony and property division.
Second, a prenup can’t contain provisions that are contrary to public policy. I had a case a few years ago involving a marital agreement that provided that husband would get half the marital estate in the event of a divorce, but if the divorce was due to his adultery or domestic violence he would get nothing. Hawaii is a no-fault divorce state, and an appellate court eventually agreed that these two could not contract to bring back fault-based divorce.
On the rare occasions that I have written prenups, they have been brutally simple: no alimony, jointly-titled property is divided equally, and whatever either party brings into the marriage or subsequently acquires and is not jointly titled is forever the separate property of that spouse. Others will create formulas or sliding scales for alimony based on the length of the marriage, or give an increasing percentage of property for each year, decade or whatever of marriage. I think that’s nuts.
Typically, prenups are sought when one of the spouses is quite wealthy and the other is not. Most people don’t really need a prenup. And frequently, it is the children of the wealthy party who are wary of the new spouse getting their inheritance in a divorce or death. In Hawaii, you can’t make an estate plan that totally disinherits your spouse—she gets an “elective share” of your augmented estate. However, your spouse can elect not to take it in a prenup.
Finally, there are three important things to make a prenup enforceable (and these conditions will only be determined after the fact in a divorce challenge to the validity of the prenup).
First, there has to be full financial disclosure. I recommend both parties fill out family court Asset & Debt and Income & Expense Statements and that they be attached as exhibits to the prenup. It may also be advisable to get appraisals of valuable assets and append those to the prenup as well. Maybe even tax returns. The party who fails to make full disclosure will have difficulty enforcing the prenup in a later divorce.
Second, there has to be an absence of duress. I had a divorce case involving a very wealthy gentleman whose wife claimed she had to go to his lawyer’s office the day before the wedding where she was shown a prenup and told to sign it. Fearing the shame and humiliation she would have experienced calling off the wedding at the last minute, she signed off. Close to that is pressing someone to sign off on a prenup that they don’t really understand. I had a friend marry a Korean lady, so I got the prenup translated into Hangul, and both the English and Hangul versions got signed off.
Third, there must be an opportunity for the other party to get the advice of independent counsel. That should be recited in the document itself. Both attorneys should sign the prenup “approved as to form.” If the non-moneyed spouse doesn’t get a lawyer, the document should at least recite that she had the opportunity, and voluntarily chose not to do so. In my Korean bride case, I steered her to attorneys who spoke her language.
Why don’t I do prenups? It’s a business decision. At most, I can get paid maybe $5,000 for one of these, but I’m exposing myself to millions of dollars in liability if there is a later divorce and the prenup is not upheld. I’m not permitted to immunize myself by getting the client to agree in advance not to sue me. Moreover, if there is litigation about the prenup, the lawyer who drafted it is likely to wind up becoming a witness in that divorce case about the circumstances of its execution. Not only does the lawyer not get paid to be a percipient witness (as opposed to an expert witness) but the lawyer is disqualified from representing the prenup client in the subsequent divorce. So, from an economic standpoint, it makes much more sense to be the divorce lawyer rather than the prenup writer. And I never sign off on a prenup written by someone else.