Collaborative Prenuptial Agreements

Our good friend Sam Hasler from Indiana has a brief post in his blog today about using Collaborative Law as the process for creating a prenuptial agreement. His blog, "Sam Hasler's Indiana Divorce & Family Law Blog" is always a source for new ideas and good approaches for dealing important family issues. Here's what he wrote about prenuptial agreements and Collaborative Law:

"From Family Law Week comes Collaborative prenuptial agreements find favour

"According to The Law Society’s Gazette, a rising number of clients contemplating marriage are asking for prenuptial agreements to be prepared using the collaborative law model. The report records a shift in attitude among clients who would prefer to adopt a more consensual approach to agreeing a pre-nuptial agreement rather than employ the more traditional, oppositional method of negotiation."


I have previously written about using Collaborative Law for prenuptial agreements for professional athletes and using it generally for prenuptials for anyone. Prenups are very often put off until the last minute before a wedding, which makes the process much more stressful and difficult. Sometimes weddings are cancelled or postponed because of intense negotiations that aren't resolved satisfactorily.


Here's why you should use Collaborative Law for prenuptial agreements:

1. The process fits the need. I am a strong advocate of using the Collaborative process for prenuptial agreements. Working out a prenuptial is almost like doing a divorce in advance. There must be a lot of disclosure, planning and problem solving. The parties need to be able to look into the future and make binding, very important decisions about their lives and financial well-being.

2. The (Texas) process utilizes a mental health professional. The negotiations often bring out the worst in people, if the issues aren't handled well. With Collaborative Law, we normally bring in a mental health professional to assist the parties to communicate effectively and deal with the stress, and that would be essential in this type of negotiation.

3. The (Texas) process utilizes a financial advisor for both parties. We also bring in a neutral financial advisor who can help each party understand the financial consequences of the terms under consideration. The financial advisor also helps evaluate the tax effects of various options. Another helpful element is having someone who can assist both parties with budgeting and projecting their needs and capabilities in the future.

4. There is greater assurance of transparency and the sharing of all relevant information. That is a fundamental element of Collaborative Law, so there would clearly be an emphasis on providing the needed information and openly discussing matters.

Using all the Collaborative professionals to prepare a prenuptial agreement will benefit everyone involved and help avoid the disasters of a failed agreement or an uninformed agreement. The Collaborative process would require that the parties start well before the wedding date, instead of waiting until the week of the wedding, which is what sometimes happens now. It should result in a better agreement, everyone feeling better about the process and a happier wedding.

Why Professional Athletes Have Prenuptial Agreements

After a brief flurry of news reports about the impending break-up of superstar baseball player Alex Rodriguez's marriage, a few recent stories came out announcing that an agreement had been reached and that there would be no further information released. It turned out to be a relatively quiet divorce for several important reasons.

• First, there had been a prenuptial agreement completed about a month before the wedding. That agreement apparently settled many or most of the issues. It helped avoid a lot of litigation and undoubtedly saved a great deal of attorneys' fees for both sides. While prenuptial agreements may seem very expensive when they are negotiated and drawn up, they usually turn out to be a great investment because they minimize the costs of a divorce or they might even help preserve a marriage (when divorce options are limited). Prenuptial agreements may seem "unromantic", and they are, but for a second or third marriage, the odds of going through a divorce are going to be a little higher. Besides, doing a prenuptial agreement does provide more disclosure between the bride and groom than occurs in many relationships, and they force the parties to think more about the future, good or bad.


• Second, there was not a lot of negotiating happening in the press. In celebrity divorces, there's often a lot of damage done because of what gets published, televised or discussed. Either the parties recognized that they both had something to lose by going public or the prenuptial agreement may have included penalties or incentives for privacy.


• Third, the parties obviously had attorneys who recognized that hanging out the couple's dirty laundry would end up soiling both of them. They were able to protect the interests of both parties by working quickly and quietly. Sometimes less is more, and that was the case here. Both parties end up losing when they start slinging mud. Professional athletes need to keep a good image for marketing purposes. Unfavorable press can result in loss of endorsements and lost opportunities for outside projects and income.

Professional athletes, whether they play in the NBA, WNBA, NFL, NHL or MLB, would all be well advised to seek a prenuptial agreement if they are getting married. It can save them a lot of money later on and make their lives more peaceful and productive. A prenuptial agreement will probably save substantial attorney fees in case of divorce and will limit the financial exposure in that situation. It can also help the athlete and the spouse address and decide financial issues for the future.

Why use Collaborative Law? Basically, preparing a good prenuptial agreement requires long-range planning by the athlete and his/her spouse, with a financial advisor as well as an attorney. Instead of just living for today, professional athletes should take the time to look to the future and preparing a prenup is a great way to get started. The best practice is for each side to have their own attorney. That helps balance the power in the relationship and makes sure that both sides are heard and understood. Collaborative Law is a very effective way to negotiate a prenuptial agreement. There is disclosure, representation of both parties and other professionals can be used as needed. No agreement is established unless both parties voluntarily agree to it.

One final point: Don't wait until the last minute! A complex agreement takes time to prepare. You want it done right and you want both parties to be comfortable with it. To create a custom agreement, information must be gathered and analyzed, a plan must be put together and an agreement must be negotiated. If it's not done right, you are just wasting money because a court can find it to be invalid. It takes time to get all the work done. In addition, waiting until the last minute will only multiply the stress related to getting married, probably resulting in two very unhappy people. Start early.

Thanks to the My Family Law Celebrity Divorce Blog for their post on this case.

Prenuptial Agreements

As couples start discussing marriage, prenuptial agreements are sometimes considered for various reasons. There can be a lot of value to be gained by using a prenuptial agreement, but it can also damage relationships if not approached in a sensitive manner. In the February 5, 2006 issue of the Chicago Tribune, Janet Kidd Stewart wrote about prenuptial agreements being used for older couples who get married.

There are a number of concerns that may surface when older couples are thinking about getting married:

• inheritances
• family peace
• creating joint wealth from shared efforts after marriage
• providing for health care
• estate planning
• debts, including medical bills.

Dealing with those issues can be very complicated because of other family members who may become involved. Older couples often have adult children and grandchildren who may become possessive and territorial about the parent's assets. This can lead to conflict and hard feelings between the children and their parent's new spouse, and sometimes between parent and child. Some adult children sincerely believe they need to protect their parent's property so it can benefit the parent, and perhaps rightfully so. Some older couples end up not marrying because of their (or their children's) fears about the financial side of the marriage.

Another option is to work out a prenuptial agreement by using Collaborative law. This is an appropriate use and natural fit because:

• it requires each party to have their own attorney,
• it's based on the goals and needs of the parties,
• it provides for complete disclosure of finances,
• a financial planner often works with the parties to provide expert tax and planning help, and
• the parties work together to reach mutual agreements without one party coercing the other.

One of the greatest benefits is that Collaborative Law forces both parties to articulate their goals and needs and to think in concrete terms about how they want their future to look. The prospective spouses can consider how to manage their investments, life insurance, and health insurance, as well as planning for long-term care for later in life. Using creativity to help them achieve their personal and family goals, couples can resolve financial issues early, keep the peace in their families and establish a firm foundation for personal and family financial security.