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Love & Marriage: 4 Rules for Client Prenups
Thursday, February 13, 2014
Partner Insights

As an estate planning specialist, I've worked on hundreds of prenuptial agreements, representing clients on both sides of the equation: those seeking to protect assets, and those from whom the assets are to be protected. I've found that most of the knowledge people have about prenuptial agreements comes from movies and television shows (Imagine all your medical knowledge coming from Grey's Anatomy).

These media-based preconceptions tend to foster reluctance among participants, who typically feel a mix of embarrassment and resentment when the topic is broached. Yet as advisors, you can help your clients end up happily married and financially secure, with a prenup firmly in hand.

Here are a few guidelines to consider:


It's not just the ultra-rich who can benefit from a prenup. These days, people are getting married later in life, which means that prior to marriage they may have created or sold a business, received an inheritance or valuable gift from a relative, or simply have been very good at saving their money.

Several years ago, a secretary at a law firm where I worked told me that she and her husband lived in the house her grandmother had given her, which was worth a few hundred thousand dollars. They then went through a divorce and, because this house was the marital home and they were married for several years, she had to buy her husband out of her grandmother's house.

A prenup agreement could have let her keep the house, and likely would have cost less than the divorce.


It goes without saying that people tend to become stressed and emotional as their wedding day approaches. Adding negotiations for a prenup to that stress can cause tempers to flare. Furthermore, some jurisdictions may impose a time restriction on when the agreement must be signed prior to the marriage.

Typically, people call to inquire about prenups four to six weeks prior to the marriage. As a result, the attorneys wind up negotiating terms as the wedding draws near. Iíve been involved with situations where couples have been signing agreements the day before (or even the day of) the wedding.

As your clients make wedding plans, encourage them to begin the process no later than four or five months prior to marriage -- and preferably earlier.


Marriage is a legal arrangement that brings with it many rights and obligations. A prenup is a smart measure simply because, unfortunately, a high percentage of marriages fail.

Yet embarrassment can play a huge factor in a client's behavior during the process -- and a dose of logic can help defuse the stress of the situation. Tell clients not to take the situation personally, and encourage them to understand that it's the particular financial and/or family situation that necessitates the prenup agreement -- not the quality of the relationship.

You can also point out that many more people have prenups than others may think; they just tend not to discuss them at parties or over dinner. Several years ago, I represented a lawyer from a large firm, who found me by sending a general email to her colleagues seeking recommendations. She later told me that receiving such an overwhelming response from colleagues who already had prenups in place helped her realize how common they really are.


You want to protect your clients' assets as they enter their new relationships, of course. Yet every prenup should create an agreement that a client can live with comfortably during the course of the marriage. While it's important to protect assets, be sure the agreement doesn't create a situation where the parties are thinking about the agreement on a daily basis -- to the point that it becomes a third party in the marriage.

Find out whatís important to your client's relationship. Priorities might include being able to live in the marital home; having access to money without having to ask; or being able to maintain a certain lifestyle if the spouse asks the client to leave a job. Once these issues are identified, solutions can be tailored to address them.

One client I represented was a school administrator with a small amount of money, who was marrying someone from a very wealthy family. Following the marriage, she was going to quit her job and follow her husband to another state so he could finish up his studies. In order to protect her and give her access to money, we negotiated, among other terms, a transfer of a sum of money upon the marriage so she had some assets of her own. The amount, while substantial to her, was insubstantial when taking into account her fiance's total net worth, and allowed her to feel more secure on a daily basis.

Some clients have focused on being able to afford to stay in the marital home if there are children; others planned to stay at home and raise children, and for them it was important not to waive alimony.

A smoother prenup process can ease any embarrassment or reluctance your client may feel, and will help both you and your client feel more secure.

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(3) Comments
Re: Rules of Engagement

Ms. Craig:

You raise a critically important consideration that does not receive the attention warranted. I will keep this brief. As a licensed attorney and investment/insurance professional, I am becoming increasingly concerned by the inclination of agents and advisors to overstep professional lines when working with clients.

I am not suggesting that your article is without merit; to the contrary and as I stated previously, it is very important. However, similar to other articles appearing in many financial professional journals, there appears to be a disregard for the "rules of engagement" as they pertain to the activities of non-lawyers when entering unfamiliar and precarious terrain.

I am currently working with a substantial client whose financial resources are governed by a prenup. My first order of business was to ensure that the client understood which side of the fence I occupied (financial advisory).

My second order of business was to ensure that any responsibility and potential liability for even the slightest perception of rendering legal advice resided with the appropriate advisor, the attorney.

I was compelled to respond with this commentary as this consideration arises often and financial advisors have to be very careful about where and how they "tread."

Interesting enough, understanding and knowing how to "navigate" the rules of engagement can often lead to more substantive and lucrative strategic alliances, along with earning a "healthy respect" from the client.

David F. Sterling, Esq., Consultant

Posted by David S | Thursday, February 13 2014 at 1:23PM ET
n pre-nup protects the rights of both the couple- components. It ensures a agreed-upon payout on the happening of an event. This protects the ultra-rich from gold -diggers. Although this a typical movie situation, nevertheless, it is true and more so in today's world where technocrats find themselves cashing in on a business early in life.
Posted by KIMMY B | Thursday, February 13 2014 at 1:34PM ET
What is the typical approach for this situation less than a year post-marriage?
Posted by Kevin D | Friday, February 14 2014 at 1:25PM ET
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