What are the Challenges in Drafting a Pre-nuptial Agreement?
A Pre-nuptial Agreement (“PNA”) is a unique form of contract, but unlike most contracts, there is an emotional component to a PNA. In the business world, contracts are used to ensure the smooth sale of goods, to buy and sell real estate, or to obtain a promise to perform services. PNAs perform the same function, but the context is different. They stab at sensitive areas of a relationship – the four pillars of romance: trust, love, care, and protection.
Another difficulty is that PNAs are often discussed close to one’s wedding date and can seriously disrupt the sound of wedding bells chiming in the intended groom’s and bride’s minds. The closer you get to the wedding, the more difficult it may be to have this conversation, but the reality is that a PNA is a necessary agreement between parties, especially when there is significant wealth on one or both sides of the altar. A good PNA can ensure the parties have managed their financial expectations of each other long before the last alteration is made on those hideous bridesmaid dresses.
There are several common situations in which a PNA can come up:
- One partner has significantly more material wealth than the other and that partner wants to preserve that wealth in case the marriage does not work out. This case is often seen in older couples who are more likely getting married for the second (or third) time.
- Both partners have wealth they want to preserve. Again, they are likely an older couple who are both getting married again.
- One partner is being supported by family money or works in a family business and the family wants him/her to sign a PNA to protect the family’s assets.
Each of these situations can be negotiated. There are many ways to manage each other’s expectations in the context of a PNA and the key to walking the PNA tightrope is to enter the discussion with excellent communication tools. Here are a few that might help:
1. Early Discussion
We believe it is best to start the discussion well before the marriage, and preferably before the engagement. This is recommended for legal reasons as well as relationship reasons. One factor courts look at in evaluating the validity of a PNA is whether there was duress in signing the instrument and/or how much time was allowed between signing the PNA and the date of the wedding. One month between signing and vows is the recommended allowance. You do not want to be putting on your wedding gown or cinching up your tie and signing your PNA on the day of the wedding.
2. Good Timing
Pick a good time to bring up the subject and make sure you allow time to have a conversation afterwards. Do not raise the subject and then say, “I’m off to Berlin for a week on business. See you next Saturday.” You want to make sure that you build trust through this conversation, assure your partner that this is not a “bad sign”, and give the impression that your partner has a say in the situation.
3. Manage Expectations
It is inevitable that people in a relationship with each other will build up expectations of their partner: “we will vacation in Lake Como every year”, “she will cook every night”, “he will be a wonderful father”, “will I get jewelry like this every year?”, “wow…there is never an issue when I want to spend Saturday mornings playing golf”, and on and on.
Rightly or wrongly, these voices play in our heads. So, when the PNA discussion comes up, some of those ideas of what life will be like may disintegrate. This can cause tears, anger, disappointment, frustration, or all of the above.
Good communication is the foundation of a healthy relationship and should serve to manage each other’s expectations in every aspect. We encourage open discussions about what life together will be like, the number of children you plan to have (if any), how the toothpaste will be squeezed, and how money will be handled, including the management of pre-marital assets and assets accumulated during the marriage.
4. Be Frank
Be open with each other. In the PNA, you will be disclosing to each other your assets and liabilities, so you should get on with the discussion well before you begin putting pen to paper. This is not to say that you lay out every single item in gory detail on the first date, but do share with each other the outline of your assets and what your intentions are regarding their protection. You may want to get legal advice before you attempt this step to learn how your assets – and your intended’s – can be protected.
5. Get Help
If you find that the PNA discussion is not going well, you may need to seek assistance from a therapist, a mediator, or other third-parties to help you walk the tightrope. It is best to pick a neutral party who has no stake in the result, unlike the aunt who really does not want to share that pile of family loot with an “outsider”.
When the time is right, you should each engage a solicitor to advise you separately on the best instrument for you and how you and your partner can collaborate on a joint agreement. At JC Legal we can help you achieve the goal of drafting the most effective instrument that works for you.
This summary is for information purposes only. Its contents do not constitute legal advice and should not be regarded as a substitute for detailed advice in individual cases. Transmission of this information is not intended to create, and receipt does not constitute, a lawyer-client relationship between JC Legal and the user or browser. JC Legal is not responsible for any third-party content which can be accessed through the hyperlink provided in this summary.