VOL. 112 | NO. 168 | Thursday, September 17, 1998
By SUZANNE THOMPSON
Sign, say `I do'
Family lawyers report the increased
popularity of prenuptial agreements
By SUZANNE THOMPSON
The Daily News
Despite the awkwardness suggesting prenuptial agreements can create, they are gaining in popularity.
Prenuptial agreements, also known as antenuptial agreements, have become increasingly enforceable and can limit, restrict or prohibit a spouses right to alimony, said Wanda Shea, a former MBA family law section chair.
In the 1996 case Cary vs. Cary, the U.S. Supreme Court upheld the contractual obligation of a premarital agreement and validated the enforcement of such documents, as a way to delineate who gets what in case of death or divorce.
The agreements also can protect separate property and assets owned before marriage, such as inheritances, stocks and other real property.
Attorney Susan Callison, who will give an Memphis Bar Association-sponsored seminar on the topic Wednesday, said most of the prenuptial agreements she has drawn up simply outline the division of assets.
"Theyre not real cut and dried, Whats mine is mine and whats yours is yours," Callison said.
She said in her practice the instruments are used most frequently by older couples who are remarrying.
These agreements can be used to protect assets to which children from former marriages may be entitled to inherit and to reassure adult children who feel threatened by a new step-parent.
In the majority of agreements, assets are left to the surviving spouse, she said. The agreement simply means the other party cannot be sued for them.
Other issues Callison has seen included in the terms of premarital agreements have ranged from who gets the family pet to how future income tax refunds will be divided.
Couples interested in using premarital agreements to address these issues should take a few simple steps to ensure the documents hold up in court, according to local attorneys.
One of the most important aspects of drafting a prenuptial agreement is providing full financial disclosure prior to signing.
"Any attorney drafting one is much more likely to have it withstand judicial scrutiny if they attach a list of assets and encourage the other party to get independent legal advice," said Janet Leach Richards, a professor at the University of Memphis law school.
The best way to handle this is by attaching a financial statement, said Lisa Circeo, an associate at the firm of Shea, King & Associates.
Making a current financial statement an integral part of the document removes any doubt that full financial disclosure has been made prior to the execution of the document, she said.
One factor that a court may examine when determining the validity of a prenuptial agreement is the time that elapsed between the signing of the document and the date of marriage, said Lara Fonville, who chairs the family law section at the Memphis Bar Association.
If the signing date is close to the date of marriage, it paves the way for an attorney to establish there was inadequate time for the other party to get independent legal representation before the wedding.
Although the agreements may address a number of items, child custody and visitation are excluded under the law from such a document, Shea said.
And, while prenuptial agreements often divide retirement accounts, those assets may not necessarily be protected by a prenuptial agreement, particularly accounts formed under the Employment Retirement Income Security Act, Fonville said.
The language in ERISA trusts can require the spouse to waive benefits and because prenuptial agreements are signed before the wedding occurs, the signing party is not a spouse.
However, the major problem with prenuptial agreements, Richards said, is they are usually clearly to the advantage of one party and not the other.
Attorney Mitch Moskovitz believes there are instances in which the documents are inequitable by nature.
"I think for a disadvantaged spouse they are horribly ridiculous," he said.
The topic is so tricky that Richards devoted a whole chapter to the subject in a book she wrote on Tennessee family law.
"It creates a tension in the relationship that is supposed to be based on love and commitment and loyalty and all of a sudden youre entering into a contractual negotiation based on death and divorce," she said.
"It definitely has a chilling effect on romance," Shea said.