Fillable Printable Premarital Agreements

Premarital Agreements

IN THIS CHAPTER

YOUWILL LEARN

•What a premarital agreement is and the

primary purpose it serves

•How the treatment of premarital agree-

ments has evolved in society and the law

•How premarital agreements differ from

other kinds of agreements made by

married and unmarried partners

•In what circumstances premarital

agreements may be appropriate

•The legal requirements for a valid

premarital agreement

•What a basic premarital agreement covers

•The current trends regarding enforceability

of premarital agreements

•The paralegal’s potential role with respect

to premarital agreements

chaptertwo

PREMARITAL

AGREEMENTS

ichard, 72, a retired engineer with five adult children,

has been married and divorced three times. He

believes he has finally met the ONE true love for him,

Elaine, 32, a widow and mother of three children. He wants

very much to marry her but not without a premarital agree-

ment, given his past experiences with divorce. Elaine has

said, “Whatever you want is fine with me.”

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32Chapter 2

Premarital agreement

an agreement made by two

persons about to be married

defining for themselves their

respective rights,duties,and

responsibilities in the event their

marriage terminates by death,

annulment,separation,or divorce

Public policy

an idea or principle that is

considered right and fair and in the

best interest ofthe general public

Per seinvalid

invalid in and ofitself,standing

alone,without reference to any

additional facts or circumstances

WHAT IS A PREMARITAL AGREEMENT AND WHAT

IS ITS PURPOSE?

A premarital agreement(sometimes called a premarital contract,prenuptial agree-

ment,or antenuptial agreement) is an agreement made by two persons about to be

married.The agreement is an effort by the parties to define for themselves rights,

duties,and responsibilities that flow from the marital relationship and that otherwise

would be regulated and determined by state law upon death,annulment,separation,or

divorce.What usually happens in a premarital agreement is that one or both ofthe

parties agree to give up spousal support,an equal or equitable division ofproperty,or

other rights they might be entitled to under state law.Despite past fears that premarital

agreements encourage divorce,they may actually promote marriage.People may

choose to marry who might not do so without the personalized “safety net”or “insur-

ance policy”the premarital agreement provides in the event the marriage does not last.

PREMARITAL AGREEMENTS IN PERSPECTIVE

In an effort to maintain social order and protect the general public interest,state and

federal legislatures regulate various dimensions ofour lives.For example,we have laws

and regulations about education and employment,about finances and business trans-

actions,about children and families,about marriage and death.Statutes and judicial

rulings are designed to balance individual freedom and protection ofthe larger society

and are based on public policies.Public policies are ideas or principles that are consid-

ered right and fair and in the best interest ofthe general public.They reflect current

morals and established customs.For example,mandatory education laws requiring

children to attend school until a certain age are based on the broad public policy that

children are vulnerable and need to be protected and provided the foundation they

need to become healthy,productive adults.In response,the state establishes and man-

ages a public education system to ensure that children receive the education required

by law.In addition,however,we have private and “charter”schools,parochial schools,

and “home schooling”ofchildren as educational alternatives for parents who want to

create their own vehicles for complying with the law,vehicles tailored to their unique

goals and needs.The state still monitors these alternatives to an extent but at the same

time recognizes the right ofparents to raise their children as they see fit as long as they

do not break the law or violate an overriding public policy.Public policies that impact

various other family law issues are referenced throughout this text.

One ofthe primary public policies that legislatures and courts in the United States

historically have supported is one favoring the marital relationship as the fundamental

structural unit ofsociety.In support ofthat policy they have legislated and decreed reg-

ulations designed to protect the institution ofmarriage and the members ofthe family

in the event ofdeath or divorce. These regulations have been influenced by prevailing

societal views about sexual morality,the vulnerability ofchildren,and gender-related is-

sues including the respective roles and relative power ofmen and women in society.In

this context,the states were initially unwilling to permit couples to design their own

agreements determining what would happen to their property upon divorce.

Although courts had,for many years,enforced premarital agreements that

addressed property distribution upon death,

agreements made in contemplation of

marriage that anticipated the possibility ofdivorce were viewed as per seinvalid until

the 1970s.The basic concern was that the party who would benefit most from the

agreement (usually the male partner) would be motivated to terminate the marriage

and the female partner would be left destitute.This perception has gradually changed

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Premarital Agreements33

Void

invalid and ofno legal effect

over the past four decades along with views about men and women,fault-based

divorce,and the institution ofmarriage generally.We now live in a society in which

the rate ofdivorce has risen and few presume that marriage is a permanent union.As

a result,we have an increasing number ofindividuals,both male and female,taking

steps to develop their own approaches to distribution ofproperty upon divorce or

death.A premarital agreement is one vehicle for accomplishing this end.

The opinion in the landmark Posnercase (see Case 2.1) describes the shift in

public policy from one that presumes the permanence ofmarriage to one that

acknowledges and enforces,under certain conditions,agreements regulating rights

upon the dissolution ofmarriage.In Posner,the wife appealed the portion ofthe

divorce decree that awarded the divorce to her husband and alimony to her in the

amount of$600 a month pursuant to the terms ofa premarital agreement between

the parties.The wife’s position was that,consistent with prior case law,the agree-

ment should not be enforced.The court held that such agreements should no

longer be considered voidas contrary to public policy when the divorce is pursued

in good faith on proper grounds.

CASE 2.1Posner v.Posner,233 So.2d 381 (Fla.1970)

FROM THE OPINION

At the outset,we must recognize that there is a vast difference between a con-

tract made in the market place and one relating to the institution ofmarriage.

It has long been the rule in a majority ofthe courts ofthis country and in this

state that contracts intended to facilitate or promote the procurement ofa divorce

will be declared illegal as contrary to public policy....

The state’s interest in the preservation ofthe marriage is the basis ofthe rule

that...an antenuptial agreement by which a prospective wife waives or limits her

right to alimony or to the property ofher husband in the event ofa divorce or sep-

aration,regardless ofwho is at fault,has been in some states held to be invalid....

There can be no doubt that the institution ofmarriage is the foundation ofthe

familial and social structure ofour nation and,as such,continues to be ofvital interest

to the State; but we cannot blind ourselves to the fact that the concept ofthe “sanctity”

ofa marriage—as being practically indissoluble,once entered into—held by our ances-

tors only a few generations ago,has been greatly eroded in the last several decades

....

With divorce such a commonplace fact oflife,it is fair to assume that many

prospective marriage partners whose property and familial situation is such as to

generate a valid antenuptial agreement settling their property rights upon the

death ofeither,might want to consider and discuss also—and agree upon,ifpossi-

ble—the disposition oftheir property and the alimony rights ofthe wife in the

event their marriage,despite their best efforts,should fail....

We know ofno community or society in which the public policy that

condemned a husband and wife to a lifetime ofmisery as an alternative to the

opprobrium ofdivorce still exists.And a tendency to recognize this change in

public policy and to give effect to the antenuptial agreements ofthe parties relating

to divorce is clearly discernible....

SIDEBAR

The full opinion in this case is available on the companion website.What are the

major reasons for not recognizing premarital agreements? What are the major rea-

sons for enforcing them? Ifyou were presently contemplating getting married,

would you want to have such an agreement? Why?

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34Chapter 2

HOW IS A PREMARITAL AGREEMENT DIFFERENT

FROM OTHER KINDS OF AGREEMENTS MADE

BY MARRIED AND UNMARRIED PARTNERS?

A premarital agreement is one ofseveral kinds ofagreements made by adults

entering into,presently in,or exiting from a relationship with another adult.

Others include,for example,cohabitation agreements,postmarital agreements,

and separation agreements.

•Acohabitation agreement is an agreement between two unmarried indi-

viduals who live or intend to live together,defining their intentions,rights,

and obligations with respect to one another while living together and

upon termination oftheir relationship.

•Apostmarital or postnuptial agreement

is an agreement made by two

people already married to each other who want both to continue their

marriage and also to define their respective rights upon separation,

divorce,or death ofone ofthe spouses.Some states,such as Ohio,prohibit

postmarital agreements by statute.

•Aseparation agreementis an agreement made between spouses in antic-

ipation ofdivorce or a legal separation concerning the terms ofthe

divorce or separation and any continuing obligations ofthe parties to

one another.Customarily the parties ask that the court approve the

agreement and make it part ofthe court’s judgment.

WHAT KINDS OF INDIVIDUALS AND COUPLES

MIGHT WANT TO EXECUTE A PREMARITAL

AGREEMENT?

Once thought ofas appropriate only for the rich and famous,premarital agreements

are becoming increasingly more common. This is not all that surprising when one

considers that about halfoffirst marriages end in divorce.Although premarital agree-

ment statistics are scarce,according to one source,some twenty percent ofremarried

couples use premarital agreements,and they have quintupled in overall frequency

over the past twenty years.

The New York-based nonprofit organization the Equality

in Marriage Institute reported that over the two-year period between 2003 and 2005,

calls about premarital agreements tripled in number.

With shifts in demographics and expanding life spans,the growing senior

population has become an audience for whom premarital agreements provide an

especially useful vehicle for addressing the challenges and fears this segment ofthe

population faces with respect to marriage and remarriage late in life.“Various

deterrents to marriage are ofparticular concern to seniors,including problems of

wealth preservation from the significant other,avoidance ofthe other’s financial

obligations related to health care and other debts,protection ofpension benefits

from previous marriages,protection against intestate succession,and interactions

with adult children,”

who may not be as enthusiastic about the impending

marriage as are the parties! To protect the children’s interests,a premarital agree-

ment can work in tandem with a will to achieve desired ends.

Premarital agreements are also particularly appropriate for parties in circum-

stances such as the following:

•There is a significant age difference between the parties.

•One or both ofthe parties have substantial property oftheir own including

real estate,investments,businesses,and retirement accounts.

Cohabitation agreement

an agreement between two unmar-

ried individuals who live or intend

to live together, defining their

intentions,rights,and obligations

with respect to one another while

living together and upon termina-

tion oftheir relationship

Postmarital agreement

an agreement made by two people

already married to each other

who want both to continue their

marriage and also to define their

respective rights upon separation,

divorce,or death ofone ofthe

spouses

Separation agreement

an agreement made between

spouses in anticipation ofdivorce

or a legal separation concerning the

terms ofthe divorce or separation

and any continuing obligations

ofthe parties to each another

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Premarital Agreements35

Mediation

approach to resolving differences

in which a neutral third person

helps the parties identify their

differences,consider their options,

and structure an agreement

acceptable to both parties

Collaborative law

an approach to reaching agree-

ments and resolving differences

that stresses cooperation,joint

problem solving,and the avoid-

ance oflitigation

•A party has an interest in a family business that he or she wants to “keep in

the family.”

•A party is responsible for taking care ofthird parties such as elderly parents

or siblings with disabilities.

•One ofthe parties is pursuing a degree or license in a potentially lucrative

field such as medicine,and the other party will be supporting the couple

through an extended education program.

•The parties have been out ofhigh school for several years,remained single,

and had an opportunity to accumulate significant property.

•One ofthe parties is giving up a successful career in order to be a “stay-

at-home”parent.

•One or both ofthe parties have children or grandchildren from a previous

marriage.

•One ofthe parties is involved in a speculative business venture that may

result in a significant increase or loss in wealth.

•One or both ofthe parties want to ensure a new spouse’s inheritance,

especially ifthat spouse will lose his or her right to a social security benefit

or alimony from a prior spouse upon marriage.

•One or both ofthe parties suffered through a prior divorce that was

emotionally and financially devastating,and they do not want to repeat

the experience.

The more common premarital contracts become,the less sensitive a topic

they are for couples approaching marriage. The usual approach to creating an

agreement is that the parties first discuss the possibility ofexecuting an agreement

and their reasons for doing so.Then one ofthe parties (customarily the one with

the greater incentive and the most to gain) selects an attorney to draft an agree-

ment.The other party ideally retains a second attorney to review the agreement,

recommend revisions,and advise him or her before signing.Occasionally the

parties will utilize traditional mediationto resolve their differences concerning

the proposed terms oftheir agreement.A neutral third party,the mediator,helps

the parties clarify their differences,consider options for addressing them,and

structure an agreement acceptable to both parties.

An additional alternative approach to reaching consensus involves use ofthe

less adversarial collaborative law process.It affords an effective method for devel-

oping premarital agreements tailored to the unique circumstances ofthe two peo-

ple about to be married.When the collaborative law process is used,“the written

agreement is prepared last and only after the partners have discussed the issues

and concerns important to them and their shared life,and have reached shared

agreements about those concerns.The collaborative agreement becomes a mutu-

ally developed blueprint for the marriage.”

Although the parties still have to

address challenging questions and require the assistance ofspecially trained coun

sel

during the process,the “difference is that the collaborative process provides a safe

and supportive setting...and...enhances the couple’s togetherness rather than

emphasizing their separateness.”

WHAT ARE THE LEGAL REQUIREMENTS FOR

AVALID PREMARITAL AGREEMENT?

A premarital agreement is both a contract and an agreement between two parties

who bear a special relationship to each other. Unlike contracts negotiated in the

business world involving strangers who deal at arm’s length,a premarital agree-

ment is a contract between two individuals presumably engaged in a relationship

ofmutual trust and confidence.Given the couple’s special relationship,courts

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36Chapter 2

Fiduciary

a person who owes another a duty

ofgood faith,trust,loyalty,and

candor

Procedural fairness

fairness in the negotiation and

execution ofan agreement

Substantive fairness

fairness in the specific terms of

an agreement

Consideration

a bargained-for exchange or

mutual promise underlying the

formation ofa contract

often impose additional requirements and a higher standard ofcare on the parties,

whom the courts view as having a fiduciaryduty to one another,a special duty of

fairness in dealing.

Although states vary with respect to specific requirements for validity,generally

a premarital agreement must satisfy the following three requirements:

1.the basic requirements applicable to all contracts

2.the requirement ofprocedural fairness,meaning fairness in the negotiation

and execution ofthe agreement

3.the requirement ofsubstantive fairness,which means fairness in the actual

terms ofthe agreement

The Basic Requirements Applicable to All Contracts

1.There must be an offer and acceptance (generally evidenced by the parties’

signatures on the agreement).

2.The parties must have the capacity to contract in terms ofage and mental

competence (although a failure to understand the legal effect ofthe terms

ofthe agreement will not necessarily render it invalid).

3.The subject matter ofthe contract must not be illegal (i.e.,the parties

cannot agree to commit an illegal act).

4.The contract must be supported by consideration,a bargained-for

exchange ofsomething ofvalue (usually the mutual promise to marry

in the case ofpremarital agreements,although courts may look for

additional consideration when one party appears to gain everything

and give up nothing).

The Requirement of Procedural Fairness

The focus ofprocedural fairness is on fairness during the negotiation and

execution ofthe agreement.In assessing procedural fairness,the courts usually

will look at the surrounding circumstances to answer such questions as the

following:

•Was each party represented by independent counsel?

•Was there adequate disclosure by each ofthe parties ofthe nature and value

oftheir assets and liabilities?

•Was there sufficient time to discuss,negotiate,and reflect on the agreement

prior to execution?

•Was there any fraud,duress,or undue influence in the negotiation or

execution ofthe agreement?

Was each party represented by independent counsel?Even though the par

ties

are generally not antagonistic as they look forward to their forthcoming marriage,

they do have “adverse”interests.Each ofthem is being asked to waive or vary

certain rights to which they would otherwise be entitled upon divorce,separation,

or death.For example,a husband residing in a community property state such as

California,Arizona,Texas,or Idaho has a right to 50% ofhis spouse’s earnings

from the date ofmarriage.Ifa man is going to enter a premarital agreement in one

ofthose states,he needs to understand how his rights and responsibilities under

state law may be altered by that agreement.He should have a reasonable opportu-

nity to consult with independent counsel ofhis own choosing.This is an especially

important consideration when the parties are ofunequal bargaining power,such

as when one party is much more highly educated and financially sophisticated

than the other.(See Paralegal Application 2.1.)

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Premarital Agreements37

PARALEGAL APPLICATION 2.1

REPRESENTATION BY INDEPENDENT COUNSEL

It is difficult,ifnot impossible,for one attorney to represent the interests ofboth

parties to a premarital agreement.The conflict ofinterest inherent in such a multiple

representation leaves the attorney open to allegations ofethical misconduct. In an

effort to protect against such a result,the following steps may be taken:

1.Ifone party declines to seek counsel,it is wise for the attorney representing the

other party to confirm in writing to both parties which ofthem he or she rep-

resents and to strongly advise and explain why it is important that the other

party seek independent counsel.This should be done in the best interests ofthe

client and the attorney.The paralegal may be asked to draft such a letter.

2.Many agreements now contain statements to be signed by counsel and/or by

the parties under oath confirming that each has been instructed to seek legal

counsel to advise them oftheir respective statutory rights in the property ofthe

other and the effect that execution ofthe agreement will have on those rights.

The paralegal should keep this option in mind when assisting in the drafting of

an agreement,particularly one involving an unrepresented party.

3.In some states,the prohibitions against multiple representation require that

the non-represented individual provide a written statement acknowledging the

fact that the sole attorney is not protecting his or her interests.This require-

ment affords additional protection against a later malpractice claim for the

attorney representing the other party.

Was there adequate disclosure by each ofthe parties ofthe nature and value

oftheir assets and liabilities?Virtually all states require some degree offinancial

disclosure but vary with respect to how much is necessary.Some states require full

disclosure,while others provide that a general picture ofone’s financial worth is

enough.Many states allow a party to waive his or her right to seek or receive disclo-

sure.Ideally financial disclosure should accurately and adequately reveal a party’s

assets,liabilities,and net worth to protect against later claims offraud or misrepre-

sentation.The preferred form ofdisclosure is a separate schedule ofincome,assets,

and liabilities for each ofthe parties that is referenced in the body ofthe agreement

and appended as an exhibit.Completed financial affidavits,tax returns,and other

documents such as deeds and appraisals may also be attached.The paralegal is often

involved in the collection,review,and/or preparation ofthese materials.

In assessing adequacy ofdisclosure,a court is likely to ask: Given the surround-

ing circumstances,did each party have,or should they have had,sufficient knowledge

ofthe other’s worth such that each ofthem could make an informed decision with

respect to the terms ofthe agreement? Generally,there is no “meeting of the minds”

with respect to the contract ifone party was provided inadequate information

regarding the other’s assets and the value ofthe rights waived.

Was there sufficient time to discuss,negotiate,and reflect on the agreement

prior to execution?Although the time period between execution ofthe agreement

and the marriage ceremony is not necessarily determinative,it is a factor the courts

will consider in evaluating the validity ofan agreement.The best advice is to allow

reasonable time for negotiation and review.Some states automatically invalidate

any premarital agreement that is signed on the day ofthe wedding.In general,the

longer the time period (within limits) between when a party was presented with the

Meeting ofthe minds

a shared understanding with

respect to the terms and condi-

tions ofa contract

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38Chapter 2

Ignorantia legis non excusat

Ignorance ofthe law is not an

excuse

agreement and when it was executed,the greater the likelihood the execution will

be deemed voluntary,but the states go both ways.In a 1991 case in Alabama,a

court held that a premarital agreement was valid despite the husband’s threat to call

offthe wedding ifthe wife did not sign the agreement.

An Ohio court took the op-

posite position in a 1994 case and held “...the presentation ofan agreement a very

short time before the wedding ceremony will create a presumption ofoverreaching

or coercion...the postponement ofthe wedding would cause significant hardship,

embarrassment or emotional stress.”

Generally,timing will be considered in the context ofthe nature,scope,and

complexity ofthe agreement.A simple agreement the parties discussed for months

addressing one bank account ofmodest value may well be considered valid even if

presented for review and signature on the wedding eve.On the other hand,a complex

agreement covering millions ofdollars ofdiverse assets between a party with signifi-

cant bargaining power and an individual with little power,few assets,and much to

lose warrants ample time for review and deliberation with the assistance ofcompe-

tent,independent counsel.Although many courts will consider whether each ofthe

parties had the background,experience,and time necessary to evaluate options and

the consequences ofchoices to be made,there is not always a requirement that a party

actually understand the legal effect ofthe terms ofthe agreement.

Ignorantia legis

non excusat! (See Case 2.2 later in this chapter.)

Was there any fraud,duress,or undue influence in the negotiation or execu-

tion ofthe agreement?Because the parties to a premarital agreement are involved in

a special,confidential relationship with each other,they tend to be more vulnerable

making agreements than strangers would be negotiating in the business world.They

may be eager to please each other.One partner may dominate and perhaps even

abuse the other emotionally or physically.One ofthe parties may have limited

English skills and/or may rely on the other,blindly trusting that individual’s superior

knowledge and skill.Ideally,the parties should be equals in the process.

One ofthe ways in which some attorneys try to protect against a later claim

that an agreement was executed under undue influence or duress is to have the

parties and their respective attorneys all present at the execution and to videotape

the event.A paralegal may be asked to schedule this taping and should be certain

the necessary equipment is available and in good working order.A series ofques-

tions such as the following can be asked ofthe parties on this occasion:

1.Have you had an opportunity to review the agreement?

2.Have you had an opportunity to consult with counsel ofyour own choosing

regarding the agreement?

3.Do you understand its terms?

4.Are you satisfied with those terms?

5.Have you disclosed all ofyour assets and liabilities and is a summary of

them attached to the agreement?

6.What other documents are attached to the agreement?

7.Have you had an opportunity to review and ask questions about the attached

documents?

8.Has anyone made any promises to you other than what is contained in the

agreement?

9.Do you understand that this is the whole agreement and that no promises

made outside ofthe agreement will be enforced?

10.Are you presently under the influence ofany drug or condition that might

impair your ability to understand what you are signing?

11.Do you have any questions?

12.Are you prepared to sign the agreement at this time?

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Premarital Agreements39

Unconscionable

so substantially unfair in terms or

result as to shock the conscience

The Requirement of Substantive Fairness

Substantive fairness refers to fairness in the actual terms ofthe agreement.A

few states require the agreement to be fair to both parties.Some take the position

that people are free to make “bad bargains,”but most courts will not enforce

an agreement ifits terms are so unfair to one ofthe parties that they “shock

the conscience ofthe court.”Generally,the scope ofthe inquiry with respect

to substantive fairness is whether the terms ofthe agreement are fair and not

unconscionable.Under normal contract review,(U.C.C.§2–302),uncon

scionabil-

ity is determined at the time ofexecution.States vary with respect to whether the

determination offairness is made only as ofthe date ofexecution or also at the

time ofperformance.

Substantive Fairness at the Time of Execution.Fairness at the time ofexecution

involves a review ofthe agreement as written,and the court will consider such

matters as the following:

Is the division ofpropertyper se unfair or unconscionable at the time of

execution?Given that the purpose ofa premarital agreement is to allow the

parties to alter the usual division ofproperty at divorce and/or death,it is

likely that the agreement will result in an unequal division ofproperty.The

court will consider fairness under the parties’circumstances.An agreement

that calls for one party to receive everything while the other receives nothing

and will end up a public charge on welfare is likely to be scrutinized closely

and not enforced.

Is an agreement to waive alimony or spousal support fair at the time of

execution?An agreement that limits or waives spousal support is likely to be

deemed valid ifit is entered into freely,with knowledge ofthe rights waived,

after adequate disclosure by both parties,and without undue influence.This

is especially likely to be the case ifthe waiveris made by a party with ample

assets at the time the agreement is signed.A waiver providing for the

allowance ofalimony under certain extreme and unforeseen circumstances

(serious illness,etc.) or a waiver that is effective only ifthe marriage lasts less

than a certain number ofyears is likely to be enforceable.Increasingly,agree-

ments provide that the amount ofalimony to be received,ifany,will be based

on the length ofthe marriage.

Substantive Fairness at the Time of Performance.A consideration offairness at

the time ofperformance (upon divorce or death) allows a court to consider whether

terms that were fair at the time ofexecution are still fair at the time ofenforcement.

Generally the focus is on whether,due to unforeseen circumstances,an agreement

that was once fair and reasonable has become so unfair that its enforcement would be

PARALEGAL APPLICATION 2.2

ELDERLY CLIENTS

Agreements involving elderly clients or other clients whose competency may be

questioned require special consideration.Many attorneys require elderly clients to

obtain an Affidavit of Competencyfrom a physician prior to execution oflegal doc-

uments such as wills,powers ofattorney,or premarital agreements to help protect

against later claims that the documents were executed under undue influence.

Paralegals may be asked to work with clients to facilitate this task.

Affidavit ofCompetency

an affidavit from a physician that

an individual is competent to

perform a particular act

Wa i ve r

the giving up ofa right or privilege

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40Chapter 2

PARALEGAL APPLICATION 2.3

IN ANTICIPATION OF AN AGREEMENT—TASKS FOR THE

ATTORNEY AND THE PARALEGAL

•The attorney should advise the client ofthe basic law governing rights and

responsibilities upon separation,divorce,annulment,or death.

•The attorney should advise the client ofthe law regarding premarital agreements

and their enforceability.

•The attorney should discuss the importance ofindependent representation

for the prospective spouses.

•The attorney should learn what the client’s motivations and goals are so that a decision

can be made as to whether or not a premarital agreement is the most appropriate

means for accomplishing the client’s objectives.This may involve an assessment of

any federal income tax,gift tax,and estate tax consequences ofvarious options.

•Necessary background information and copies ofdocuments need to be

gathered including the following,a task often accomplished by or at least with

the assistance ofthe paralegal:

•the names,addresses,ages,and social security numbers ofthe parties

•the date ofthe intended marriage and the flexibility with respect to that date

•information regarding prior marriages and children/grandchildren ofboth parties

•information regarding all forms ofincome and assets ofthe parties.A thresh-

old value may be set for assets that should be identified,e.g.,any property

valued at over $5,000 or $25,000 based on the size ofthe parties’estates.

A paralegal or the attorney will often work with the client to be certain that all

kinds ofassets ofvalue are included (collections,stock portfolios,antiques,

etc.).

•copies ofpotentially relevant documents,including,for example,trusts,deeds,

retirement plans,insurance policies,and appraisals ofreal estate,artwork,

jewelry,and the like

•information regarding debts/liabilities ofeach ofthe parties

•information about any unique and/or foreseeable circumstances (such as one

party already having been diagnosed with a debilitating or terminal disease or

special

needs ofany children ofa party,such as severe physical or mental impairments)

•The paralegal should confirm current requirements for premarital agreements

in the state ofexecution,such as whether the agreement must be witnessed,

notarized,and recorded.

unconscionable.There is no precise definition of“unconscionable”that binds

all courts.Rather the assessment is made on a case-by-case basis.A New Hampshire

court has described unconscionability in terms of“circumstances so changed since

execution that enforcement would shock the conscience ofthe court,”and “changed

circumstances so far beyond the contemplation ofthe parties at the time ofexecution

that enforcement would work an unconscionable hardship.”

PREPARATION FOR DRAFTING A PREMARITAL

AGREEMENT

Paralegal Application 2.3 identifies several ofthe tasks that should be performed

prior to the actual drafting ofa premarital agreement.

Paralegal Practice Tip

Parties in both common law and

community property jurisdictions

may execute valid premarital

agreements.

Paralegal Practice Tip

Clients often ask paralegals ques-

tions concerning the law as it

applies to their cases. Even if the

paralegal knows the answer, he

or she must resist the temptation

to engage in the unauthorized

practice of law by responding with

legal advice or analysis. The

safest response is to indicate that

he or she will bring the question

to the attention of the attorney

and get back to the client with a

response. Many firms prepare

in-house publications covering

“most frequently asked questions”

on a variety of topics or obtain

them from professional organiza-

tions, such as the American Bar

Association. The availability of

such publications allows the para-

legal to avoid an ethical problem

and yet meet the client’s need by

giving him or her the handout

and saying, “Perhaps this material

will be helpful in answering your

question.”

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Premarital Agreements41

WHAT KINDS OF PROVISIONS DOES A

PREMARITAL AGREEMENT CONTAIN?

Each premarital agreement is unique because it reflects the intentions oftwo specific

people,each with their own goals and needs.However,there are some provisions

that are present in virtually all premarital agreements:

1.A preamble (introductory segment) that identifies the parties and describes

their intentions

2.Schedules ofeach party’s assets and liabilities,which may include anticipated

gifts and inheritances that are reasonably certain and ofknown value

3.A definition of“separate property”and a description ofhow each party’s

“separate property”and its appreciation and proceeds,ifsold,will be

treated in the event ofdeath or divorce

4.A definition ofmarital or “joint property”and a description ofhow marital

property ofvarious kinds (real estate,jewelry,other personal property) will

be treated and what role,ifany,contribution will play

5.A statement ofthe rights each party will have to alimony or spousal

support ifthe marriage ends in a legal separation or divorce,or a waiver of

those rights

6.A provision relating to death benefits or waivers thereof

The Uniform Premarital Agreement Act (UPAA) provides that the parties

may also contract with respect to personal rights and obligations during their

marriage,provided the terms do not violate public policy or existing statutes.The

parties are generally free to contract,and may want to include provisions relating to

several aspects oftheir life together.One or more ofthese terms may taint the entire

agreement and render it void and unenforceable.An attorney may want to confirm

with the client in writing that there is no guarantee that a particular provision will

be enforced by the courts.Paralegal Application 2.4 identifies some potentially

problematic terms.

PARALEGAL APPLICATION 2.4

POTENTIAL RED FLAGS

•The parties cannot agree to engage in criminal activity.

•The parties may include provisions relating to child custody and support but

they cannot bargain away the rights ofthird persons (their children).Such

provisions will be subject to approval by the court that retains jurisdiction over

child-related issues.An agreement that children from a party’s prior marriage

may not live with the parties may be held unenforceable as a violation ofpublic

policy and not in the best interests ofthe children.

•Terms that tread on constitutional rights may not be enforceable,such as:

•An agreement to raise children in a particular religion may be viewed

as violating a party’s (or a child’s) right to freedom ofreligion,

although a court may enforce a provision that a party be required to participate

cooperatively in obtaining a religious separation or annulment.

In some coun-

tries where the civil law is based on the teachings ofIslam,agreements contain

both religious and secular provisions.Ifa party seeks enforcement ofthe agree-

continued

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