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Okay, you’ve convinced me. How do I go about getting a prenuptial agreement drawn up?
One thing not to do is rely on one of the many “how-to” CD-ROMs for creating your own prenuptial agreement. Computer programs, certain web sites and resource books are a good starting point for a discussion with your partner, but after you’ve both jotted down some notes, ask a good attorney to draft your agreement according to the laws of your state. Pre-nups made with a CD-ROM are too easily contested as in a court of law -- so, do-it-yourselfers: beware!
Before signing a pre-nup, each of you should consult a separate attorney to make sure that the final agreement works for each of you. This may seem awkward, but it allows you to express any remaining concerns privately, acts as a final protection against oversights, and can prevent confusion later on.
Are we required by law to have separate lawyers?
Yes, in some states separate legal representation is required for the agreement to be valid. Even where separate representation isn’t required, it can smooth a separation settlement by weakening any claim by either of you that you did not know what you were signing, did not understand the agreement, or were unfairly represented by counsel. Your lawyers should sign the agreement as well, to show that they have reviewed it care fully.
How should I prepare for this meeting? What will the lawyers who are drawing up my pre-nup want to know?
Several things. First, it is very important that you and your partner disclose to each other all of your assets and liabilities. Full disclosure is essential, and will include all respective property, income, debts, obligations and expenses, and anything else that will affect the value of your estate, now or in the future. Second, you and your partner must agree that you are entering into the pre-nup freely and without undue coercion. Courts can be very sensitive to the issue of coercion. If one partner is deemed to have exerted undue pressure on the other to sign, a pre-nup can be overturned. Also, the terms of the pre-nup must be fair.
What does “fair” mean in this context?
In this context, “fair” means that the agreement takes into account your age, your partner’s age, your state of health, your job, your income, your standard of living, your family responsibilities if applicable, and your preexisting assets, whether these include real property, an investment port folio, an insurance policy, or anything else of value. You and your partner must show evidence that you understand all of each other’s assets and income. Sometimes, your lawyers will suggest that you or your partner bring copies of recent tax returns, monthly statements from a brokerage firm, or other financial documents that could affect the pre-nup. Also, you must both show that you fully understand the legal and financial consequences of the agreement. If a court later deems the agreement unfair or incomplete, it can be thrown out.