Recently many articles have been appearing on the internet extolling the virtues of entering into a prenuptial or premarital agreement prior to your marriage. I offer the following reflections from my practice of law and work as a mediator to strongly counter the idea that prenuptial agreements have no “cost” and provide only benefit to a marrying couple. Both people entering into marriages should seriously consider what these realities are prior to engaging in the idea that a prenuptial agreement will be good for you and your marriage.
Reality 1: Negotiating a prenuptial agreement may irrevocably corrode your marriage and has the potential to make divorce much more likely.
The future spouse who pushes for a prenuptial agreement demonstrates a lack of faith in the other and a lack of commitment to the marriage. That prospective spouse also presumes a lack of fairness from the other in case of divorce.
There is usually an “initiator” spouse, and a “compliant” spouse. The negotiations will always be remembered as callous by the “compliant” spouse. The dynamics of the negotiations set up a bad pattern for the marriage.
Negotiating a prenuptial agreement is not romantic and can destroy a portion of the couples’ love forever. It is a harsh business negotiation, made harsher by the lawyers who must be involved, because the agreement is generally not enforceable without involvement of separate legal counsel.
Marriage is a mixture of a complicated set of laws, customs, expectations, and culturally-based understandings. A premarital agreement will upset this balance in unexpected ways and is bound to have unintended consequences.
Most lawyers representing parties in prenuptial agreements have no sensitivity to the harm they cause the couple and simply act (or pretend) as if it is purely a business deal. Marriage is not a business.
Often the initiating party (or their lawyer) says, “You can just put the premarital agreement in a drawer and forget about it.” That is not true. The premarital agreement cannot be forgotten and is presumptively legally binding as soon as it is pulled out of the drawer.
The initiator of a prenuptial agreement fails to trust and appreciate the balance of good common sense and equity embodied in state divorce laws. These laws were carefully developed during a long period of time and are designed to provide for fair solutions to all aspects of divorce, including the financial elements.
Many things, unforeseeable at the time the prenuptial agreement is signed, will likely happen during the course of a marriage. Applying these state laws at the time of divorce is more sensible than anything the parties can think of years before the divorce occurs.
If a “better” result than would be obtained by state divorce laws accrues to the party who initiated the premarital agreement, that “better” result is by definition unfair and a result of overreaching.
Reality 2: The two parties negotiating a Prenuptial Agreement do not generally have equal bargaining power, so the Agreement tends to be coercive and lacking in fair and equivalent consideration.
I have seen many cases where parties negotiate prenuptial agreements very close to the wedding and after the invitations have been sent out. This is not conducive for arm’s-length bargaining about a financial contract that may affect the next 50 years of your life.
Prenuptial agreements are generally one-sided, but are “dressed up” to pretend that there is consideration for the contract on both sides.
The financial contract at the heart of the Prenuptial Agreement involves the largest financial settlement you will ever make in your life, because it includes all property – past, present, and future; inherited, earned, and unearned – , of each of the spouses.
Even mediators can be insensitive to the power imbalance in the parties when assisting clients in negotiating a prenuptial agreement. Mediators should be very aware that the agreement proposed by “both parties” may be really the thoughts of only one and that the other party feels coerced, although does not admit it. All motivations and feelings should be exposed and discussed in the mediation prior to proceeding.
Reality 3: Prenuptial agreements are generally not appropriate for people entering into first marriages, whether or not there is a disparity in income and assets.
Marriage is an exciting joint venture. If some of the aspects of the joint venture are removed by the premarital agreement, the marriage will become weaker. An important part of the joint venture of marriage is the financial partnership. A spouse may correctly feel that some of this aspect of the marriage has been taken away if a premarital agreement is entered into decreasing the spouse’s rights.
State divorce laws can handle the issues of disparity of income and disparity of premarital assets if and when the spouses get divorced. Avoiding court at the cost of an agreement that may make it more likely that there will be marriage failure may not be a sensible trade-off.
However, prenuptial agreements can be highly useful for people entering into second marriages who have children from the first marriage. An agreement can balance a spouse’s loyalty to the new spouse and with the spouse’s concern and loyalty to the children of the first marriage.
Reality 4: A Prenuptial Agreement often damages the relationship between the two families-of-origin.
A party (or the party’s parents) may want a financial agreement prior to the marriage due to the existence of family wealth. The premarital agreement generally isolates all family property as not part of the marriage, forever. Result: the future spouse’s family feels humiliated and disrespected, and never forgets the rebuff. This is not good for the parties’ marriage, as it will result in family-of-origin conflict that will be present during the entire marriage and remembered until death.
One common fact pattern that I see often is this: the future spouse does not want to have a prenuptial agreement, but his parents insist. The prenuptial agreement is made. The wife feels her husband was unable to stand up to his parents, and loses respect for him.
The control of the marriage by one party’s family of origin disturbs the delicate balance of a marriage and makes it more likely to fail.
Reality 5: The terms of a Prenuptial Agreement are often quite unfair at the time of divorce, even though they are generally enforced by a Court.
Courts routinely enforce premarital agreements that give a spouse a fraction of what the spouse would “deserve” under state law. This proves that the deal made in the prenuptial agreement years earlier were unfair to that spouse.
Parties struggle in courts over prenuptial agreements; prenuptial agreements per se do not eliminate court battles.
Divorce laws are fair. That’s why they were developed. Trust in them (and in your good will and sense of fairness to each other) to do the right thing at the time of divorce. Do not rely on a set of financial agreements made years earlier prior to the marriage that may be totally out of sync with the real facts at the time of divorce. Trust that by foregoing the premarital agreement you have made your marriage stronger and more likely to succeed.
The year was 1997. India had recently introduced the Arbitration & Conciliation Act, 1996, and was vigorously pursuing the introduction of Court Annexed ADR (arbitration, conciliation, mediation, and judicial settlement)...By Prathamesh D Popat