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| Everything you need to know about
prenuptial agreements |
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Without a formal contract, you could end up a lot
less rich -- like director Steven Spielberg. His ex-wife, Amy Irving,
got half of what he earned during their four-year marriage because
their prenup was scribbled on a napkin and she didn't have a lawyer.
Her take: $100 million.
Here are a few more tips:
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Use only matrimonial lawyers who
are familiar with prenups and the laws of the state in which
you will be living. |
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Know that you cannot waive rights
to child support payments. |
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Understand that your spouse's will
can't supersede the prenup if the will is stingier. But a will
can be more generous than a prenup and leave the widow or widower
more than what they agreed to before the marriage. |
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Finally, and although it seems obvious,
make sure the agreement is in writing and the signing is witnessed
by a lawyer. It is recommended the contract be signed in triplicate
with the groom- and bride-to-be each getting an original copy,
and a third being kept with an independent lawyer, CPA or in
a safety deposit box. |
Keeping it up
to date
Zwack encourages couples with prenups to review them every few years.
After 10 years of marriage, for example, you might
want to consider giving your spouse more than the original prenup
provided for. "Prenuptial agreements are written defensively,"
he said, "so after a certain number of years, it's good to
be more generous."
One option for softening the blow of a prenup is to
add a "sunset clause," which specifies a time at which
the contract would expire -- for example, after 10 years of marriage.
"Some people like that idea, others don't,"
says Dunnan. "However, marriages do end after 10 or 20 years,
so review it with your lawyers carefully."
Legal benefits
of prenups
Difficult as it may be to talk about money before marriage, doing
so can save heartache and hassles in the long run. A prenup can
minimize the financial and emotional toll of a divorce. Couples
without one will have their assets distributed for them by the state
if the marriage ends and they disagree about who should get what.
Without a prenup, assets could end up in the hands
of your spouse's children from a previous marriage instead of your
own kids, or they could go to a slothful mate who did nothing while
you toiled away at a business or book that eventually became a big
success.
"If you don't want a divorce court to make the
final decision about how your assets will be divided, a prenuptial
can protect you," says Dunnan. "Without a prenup you're
letting your financial future be determined by a third party."
If you live in one of the nation's nine community
property states -- Arizona, California, Idaho, Louisiana, Nevada,
New Mexico, Texas, Washington or Wisconsin -- the law says property
accumulated during the marriage will be divided equally.
In all other "equitable distribution states," assets are
divvied according to what the court deems fair. The judge would
take into consideration things such as the length of the marriage,
whether there are children, and the couple's age, health, job skills
and other factors. Alaska is a special case -- it's an equitable
distribution state, but it has a law that allows people to voluntarily
enter into a community property agreement for certain assets.
Zwack says premarital agreements are a personal decision,
but without one couples relinquish not only power over their assets
but privacy as well.
"(The courts) shouldn't have to step in and interfere
with a husband and wife's private financial affairs," he says.
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