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The Problem with Prenups — How Mediation Can Help

by Laurie Israel, Esq. First published in The Huffington Post in two parts, August 31 and September 2, 2011.

There have been many articles on The Huffington Post and elsewhere on the internet touting the benefits of prenuptial agreements, such as, “Why Engaged Couples Should Sign a Prenup.” These articles typically talk about how resolving and clarifying money issues prior to marriage is a good thing. However, they do not take into account the very important component of most good marriages: the sharing of money and resources. So prenups aren’t necessarily the best thing since sliced bread — they can pose many problems for the future spouses.

In Part I: “The Problem”, you’ll see how attorney-driven prenups negotiated in the usual way can cause problems for the future spouses at the onset of their marriages. In the next Part II: “The Solution”, you’ll see what a negotiated prenup is like, both in terms of result and process, and why it might be a better way to go about it.

Part I: The Problem with Prenups

Why have a prenup. There are circumstances where prenuptial agreements address bona fide issues that could derail a marriage. For instance, it may be a second marriage for one or both of the spouses, with children from a first marriage. In these cases, a carefully drafted prenuptial agreement can reduce financial tensions in the marriage and make the marriage better. Or, a family with money may insist that their child have a prenup. The future spouses may comply in order to create family peace.

But prenups can overdo it too. They often go far beyond what is necessary to accomplish narrow goals. And, because money and finances are one of the central aspects of marriage, overdrawn prenups can cripple a marriage before it even begins. The old saying “Money is love,” has much truth to it. Although in our culture we marry for love, one of the expressions of love is providing financial security for the beloved. Therefore, prenups tend to signify a withdrawal of love right at the outset.

What happens when you “lawyer up” in a prenup.

The other big problem of premarital agreements is the process in which it is usually done. At a very tender and loving time in their relationship, the parties “lawyer up.” They are now transformed into adversaries.

Imagine this scenario — it happens all the time.

The future spouses are in love. The wedding date has been set. Arrangements have been made, and the invitations may have been sent. The couple briefly discussed a prenup earlier but hadn’t really talked about the terms.

Then one of the parties (generally the more-moneyed spouse) hires a lawyer. That lawyer draws up the first draft of the prenup. The initiating spouse may not have discussed the issues he wanted to address in the prenup and what terms he wanted with his own lawyer. He just asked for a “prenup” and got one.

Here comes the “scorched-earth” prenup. Generally the more-moneyed spouse’s attorney sends a typical “off-the-shelf” prenup. It says that all money earned during the marriage is the husband’s to control. All property accumulated before the marriage and proceeds and gains on it are also his to control. And the husband can decide whether or not to leave his new wife anything if he dies while the marriage is ongoing, even if they’ve been married 30 years. And she has no legal rights remaining to contest any of these terms.

And, by the way, the prenup says that there is no alimony, ever. Even if she leaves the job market and becomes a stay-at-home spouse with children and the marriage is very long, there is no alimony. I call this the “scorched-earth” version. This becomes the first salvo in the prenup war.

The less-moneyed spouse is asked to get a lawyer, and her lawyer receives the draft. The lawyer then has to break the bad news to his client. She is devastated that her fiancé would be so mean. Their relationship may never heal from this initial blow.

I see this type of prenup very frequently when I am asked to review prenups on behalf of a client – even in the case of first marriages for both parties.

Hurt feelings. As soon as the less-moneyed spouse understands what’s in the prenup, her feelings are understandably hurt. Very badly. She wonders who was behind this draft, her fiancé or her fiancé’s attorney? Why would her future husband want to withhold property from her? Why should he control everything? Why can’t they have a joint venture in at least part of their marriage? Why wouldn’t he want to leave her his assets if he dies at a time the marriage is ongoing? Why not, indeed?

She wonders what happened to the love they had. She wonders why her fiancé wants to put her in a bad position. She wonders why would he want to be unfair to her.

The future husband feels like a cad. And yet, he trusts his lawyer. The lawyer might be his business lawyer and has always given him good advice. Changing the prenup becomes a difficult, uphill battle. His attorney resists change and says, “This is just a business deal,” or “This will just go into a drawer and be pulled out if it’s needed later,” or “This is what a prenup is.”

Negotiations. What proceeds is a series of fairly ugly negotiations through the two attorneys. The attorneys speak to each other and with their respective clients. The future spouses are very uncomfortable because they are now adversaries in a legal process. What started out as two people loving each other and wanting to marry has morphed into something else. The less-moneyed spouse feels she cannot share what is happening to her family, because their feelings towards her fiancé will change. She is dealing with it, and feels totally isolated. There are always tears shed.

Exhaustion sets in. The parties become exhausted with the struggle. They just want to get it over with. The wedding is approaching. They know the prenuptial agreement is flawed, but they sign it. It will be the economic guideline for their marriage. However, the anger and hurt generated by this process will always be remembered, and can weaken the marriage at the outset, even if the prenup gradually changes and becomes more balanced and narrowly drawn. The prenup may even make divorce more likely. Perhaps much more likely depending on what the prenup says and how bad the process of negotiation was.

Part II — The Solution — The Mediated Prenup

In the first part of this article, Prenups — Don’t Lawyer Up, Mediate! — Part I: “The Problem”, I discussed the dangers in doing prenups the usual way – lawyering up and making it like an adversarial business deal. This usually results in a very bruising and destructive encounters between the future spouses (and their attorneys) right before the marriage. And the quality of the resulting prenup can be very poor, as it may not be tailored to the needs and aims of the future spouses. A prenup like that (and the negotiation process that produced it) can create lasting harm to the health of the marriage.

In this Part II: “The Solution”, I describe how future spouses can use mediation to formulate the terms of their prenup. Mediating prenups has many great advantages over negotiating prenups, the latter which uses “traditional” lawyer-based methods.

A better alternative – The Mediated Prenup. A significant part of my practice has been as a mediator between two fiancés who wish to put a prenup into place for good reasons. My mediation clients have found the mediation process to be a much better way for them to come to terms when a prenup is needed.

In mediation, the couple formulates the terms of the prenup, face-to-face, with the assistance of the mediator. Unlike “lawyering up,” they are modeling communication, collaboration, and mutual understanding and respect in coming to the terms of the prenup. This action at the outset of their marriage is an achievement that reflects the connecting process of a good marriage.

Here are some of the steps of a mediated prenup:

Choose a mediator. I think it’s best to choose a divorce mediator to help a couple mediate a prenup. Another reason for choosing a divorce mediator is that they have great experience in seeing what makes marriage fail, and conversely, what makes them not fail. Since a good part of the prenup deals with what happens at a divorce, a divorce mediator is probably in the best position to help the couple imagine fair and workable provisions in case the marriage fails, especially if it fails far into the future.

And, because the result will be a complex legal agreement (generally drafted by the mediator), the mediator should be lawyer. Make sure the mediator/lawyer is experienced in drafting prenuptial agreements and in divorce law.

Discuss your concerns and interests in mediation sessions. The prenup mediator will guide your discussion. The mediator can help you envision what the prenup will say about what happens at death or divorce. The mediator will give you explicit information as to what the law in your jurisdiction provides in the case of divorce or death, so that you will know exactly how you would be changing that law in the prenup.

Usually an “off-the-shelf” prenup is like cutting butter with a meat-cleaver. Because the prenup mediator is experienced in drafting prenups, he or she can help by suggesting creative provisions that you may not even be aware of.

For instance, you can create an area of joint economic venture in the marriage. This domain can increase with the length of the marriage. Or there can be a gradual sharing of separate assets based on the length of the marriage. In short, the mediator can suggest the most efficient and humane way of achieving each of your mutual (and separate) goals in the most effective and narrow way possible, leaving your marriage intact.

Mediation levels the playing field. A mediator is a neutral party who works to hear each side and level the playing field. Each of the future spouses will be able to express his/her thoughts about what the prenup should do. A party can also, in the mediation session, express the opinion that no prenup is needed. The mediator can help the couple reconcile differences in a fair way that is satisfactory to each. Mediation does not feel like bullying. The parties are in control of the process.

In order for it not to hurt the marriage, a prenup must not be coercive. This is also a requirement for a prenup to be enforceable. Each party must freely and voluntarily agree to the terms. If the agreement is not coercive, the parties will likely stand behind it if there is an initiating event that causes it to come into play. There is no better way to come to a true meeting of the minds than to do it face-to-face in mediation sessions with an experienced prenup mediator.

Reviewing attorneys. In most cases, the mediation clients have reviewing attorneys look at the agreement. The parties’ attorneys can provide input during the process and can be a helpful part of the mediation process. They can make good suggestions as to how to make the prenup better and more reflective of the future spouses’ goals.

The mediator can refer the couple to “mediation friendly” reviewing attorneys. These attorneys are sensitive to the dangers of prenups, are their client’s advocate, but also understand and support the terms their client may wish to make in the agreement. These attorneys will not substitute their own idea of “what a prenuptial agreement should be” and will respect their client’s decisions. In this area, sometimes advocacy is not served by having a client get the “best financial deal possible,” but by addressing and meeting real concerns and client goals as least restrictively as possible.

How it feels. My prenup mediation clients report that they are very happy with the mediation process. They still feel very good about each other as they embark on their wedding day, and support the terms of the prenup. This has the effect of making the prenup more enforceable if it ever needs to be put into effect.

The more moneyed spouse doesn’t feel like a bully, because he wasn’t one. The other spouse doesn’t feel bullied. They both feel that the final agreement reflects both of their needs and interests.

They have performed the first difficult act of their marriage and have done it well. They can walk down the aisle with their heads held proudly. The mediated prenup has not hurt their chances of having a strong, lifetime marriage.

© Laurie Israel 2011.

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