As more and more couples are waiting longer to marry, California lawyers are seeing an increase in requests for Premarital (also called Prenuptial) Agreements. By the time they get married, many people already have assets, such as retirement accounts and real property, and some even have children from a prior relationship. During the COVID19 pandemic, many people experienced the downsides of not having a premarital agreement and/or updated estate plan; with the loss of remarried loved ones, they also lost their family legacy to a stepparent or step grandparent. In one case, mom passed away quickly and, having no “prenup” or estate plan, stepdad, by default, got mom’s premarital assets. Result? Her two adult sons (who did not get along with stepdad) were given a couple of jet skis and were told to go away. Stepdad kept the family home, mom’s car, bank accounts, and personal belongings. You never think it will happen to you, until it does.

Despite its negative reputation, prenups can be an opportunity to plan for a successful marriage, to have a voice in the management of separate property assets during the marriage and to create a joint plan for separate and community property assets in the event either spouse predeceases the other as well as in the event of separation or divorce.

The word “prenup” can be a trigger given the “traditional” process: two lawyers, each in private session with their client, the first drafting a proposed agreement that strongly favors her client (who likely has more money and assets than the other party), the second receiving the draft agreement, explaining to his client how grossly unfair it is to her, and editing the agreement in favor of his client. This continues back and forth until the attorneys confirm that their clients have approved a final draft. The experience can be so negative, that the relationship is harmed rather than strengthened.

This process feels adversarial for a couple of reasons. First, the negotiations start from a competitive position, in favor of the initiating party. The receiving party then mirrors that behavior, given how outrageously unfair the first draft was. And they continue until they find a middle ground. While less extreme than the initial draft, there often remain provisions that leave one party feeling insulted or hurt.

Second, direct communication between the couple rarely happens and is typically not productive. Given how uncomfortable many couples are in talking about things like money, they will avoid direct discussions and only speak on such topics through their lawyers. Not only does this set a poor model for communication and problem-solving during the marriage, it’s also a time-consuming and expensive way to create the agreement itself.

Enter the Collaborative Premarital Agreement Process, which looks something like this:

Sam calls lawyer Diana for a prenup. Diana tells Sam it’s important for fiancée Jo to have a lawyer as well, and that Jo may want to look into finding a collaborative lawyer. Diana sends Sam some information on the collaborative process, and they schedule their first meeting. If Jo hasn’t yet retained a lawyer, Jo is invited to that meeting. The first meeting is limited to discussing the process options – the actual negotiation of the agreement will take place only when Jo has retained a lawyer. If Jo already has a lawyer, both lawyers will meet to create the process for collaborative discussions.

Diana (and Jo’s collaborative lawyer if already retained) will jointly explain the collaborative process to co-create the Premarital agreement, which includes:

  • Jo and Sam meeting with both collaborative lawyers individually and in 4-way meetings. Often, a neutral family specialist (a therapist) and/or a neutral financial professional is/are brought in as well. This is a client-driven process, with the collaborative professionals helping the couple co-create an agreement that meets their individual and shared interests and goals.
  • Sam and Jo exchanging full financial disclosures with each other. Full financial disclosure is required for all premarital agreements to ensure that both parties are making informed decisions. This is key to an enforceable agreement.
  • The collaborative professionals guiding the couple through productive and respectful discussions, making sure that neither feels pressured. Another key piece that judges look for when enforcing prenups is the validity of the agreement which depends, in large part, on the voluntary and informed participation of each party. That means that neither was coerced, under duress, or mis-informed; that both had the time, space, and information to calmly review and understand each part of the agreement.
  • The collaborative professionals facilitating the discussions to help the couple build the financial foundation of their marriage. The focus is the relationship and future health of their family.
  • The couple speaking individually and confidentially with their individual collaborative lawyers AND with each other directly, with the support of their collaborative professionals.
  • The collaborative lawyers jointly drafting the Premarital Agreement for the couple to review. There may additional revisions as well as meetings to go over the agreement as needed, and then the signing ceremony with everyone present (or not – it’s really up to the couple).

How is this a better way to start a marriage?

  1. Collaboration. Working together creates an environment where everyone supports shared goals and understanding. There is no unknown lawyer promoting an extreme position.
  2. Direct Communication. Productive direct communication results in stronger and more complete solutions and reduces legal fees by eliminating the time it takes for party A to communicate to his attorney who then communicates to party B’s attorney who then communicates to party B and reverse for the response.
  3. Interest-Based Discussions. Where the traditional approach is position-driven (my house stays my house no matter what), the collaborative approach focuses on interests. For example, I want us to share my house during our marriage and preserve it as a legacy for my children. The couple in the collaborative model are encouraged to discuss both non-financial interests as well as their financial interests. The resulting agreements are more likely to satisfy the interests of both and create a foundation for a long and happy marriage.

There is no one-size-fits-all when it comes to creating your premarital agreement. The collaborative process strives to create a more productive and inclusive model than the traditional adversarial process of one-sided bargaining. The collaborative process can be tailored to the needs of the specific couple and can be started individually with the family specialist and/or each person’s collaborative lawyer to work through hidden interest and how best to present them. This process also sets the framework for working through difficult discussions moving forward, thereby setting a foundation for a successful marriage.

This article was originally posted on July 29, 2022.

English/Spanish »