Tag: postnup

Five Simple Reasons for a Prenup

Posted by Ron Kauffman on

If you’re planning on getting married this year, you may be thinking about getting a prenuptial agreement. If so, you would not be alone. More and more people have requested prenups in the past few years. Here are five simple reasons why you should consider a prenuptial agreement before you get married.

Prenuptial Agreement

Prepare for the Worst

While I have written on the topic of prenuptial agreements before, U.S. News and World Report offers an article with some pros and cons about prenups you may want to consider. For example, entering a prenup can help you prepare for the worst.

If you watched your parents’ divorce – or have close friends who have divorced – you understand that divorce can happen to anyone.

What you may want to consider is that divorce can be planned for, so that its consequences are less severe on you. For example, a prenup can eliminate stressful issues relating to alimony, property division and your inheritance.

Protection from Debt

A prenup can also protect you from your spouse’s debt. Debt is probably one of the most common reason for a prenup with people going through first-time marriages. Sadly, part of divorce means taking care of debt that was incurred during the divorce.

In a perfect world, both people walk away responsible for the debts they created. Unfortunately, that is not the law.

The problem with debt is especially important today considering how much student debt people are carrying. No one wants to get divorced and add their ex’s graduate school debt to their own. A prenup can help you in dividing debts before they become a problem.

Transparency

A prenup forces you to commit to full transparency when it comes to talking about your finances.

If you openly talk about a prenup, chances are you’ll become better as a couple at discussing details about your finances and other concerns about marriage.

During your conversations with your future spouse, you may also learn some important things about your partner. You may, for example, find out before the wedding that the person you’re going to marry has numerous lawsuits and years of unpaid taxes, what your role as a parent will be, and other issues.

Protect Valuables

A prenuptial agreement can protect valuable assets you want to stay in your family. For example, your grandmother’s diamond ring, that has been in a family for generations, and has acquired a personal significance and sentiment far beyond its market value, could be an heirloom you want to add to an agreement.

A prenup is meant to govern how assets such as investments, grandmother’s diamond ring, and property will be handled if after the marriage you decide to divorce.

Because of the importance of a prenup, if your future spouse comes to you with a prenup, and you haven’t been involved in writing it, you’ll want to bring in your own attorney.

Focus on Your Future

A prenup forces you to focus on the future. This may be a prenup’s biggest advantage and disadvantage. You are able to decide now how to handle and prepare for a future event.

The problem of course, is that no one knows what the future will bring. One person can leave a marriage much wealthier than the other. Or it could go the other way, and you could be contracted to pay your partner far more than you’re able.

That uncertainty about the future doesn’t mean you shouldn’t get a prenup. Generally, if you or your partner has a lot to lose in a possible divorce, you should consider getting a prenup. If you own a business, have a large retirement account or assets you want to pass onto your children, a prenup is essential.

The US News and World Report article is here.

 

Set Up a Divorce Plan

Posted by Ron Kauffman on

USA Today reports that few people marry and then plan for divorce or death. But based on recent statistics, that is precisely what we should do. What are some things you should do to set up a divorce plan?

Set Up a Divorce Plan

The Statistics

Consider this: The average age of a widow in the U.S. is 59 and women divorce for the first time at age 30 (on average). Add to those statistics the fact that men tend to die five years before their spouses (76 for men versus 81 for women).

Most people have heard the statistic that “50 percent of marriages end in divorce.” That statistic seems to have originated in the 1980’s. Today, it is thought approximately 42-45% of marriages in the United States end in divorce (this does not include legal separations).

But when you break that down by number of marriages, you get some interesting additional facts. For example, while 42-45% percent of first marriages end in divorce, for second marriages around 60% end in divorce. Third marriages? Roughly 73% of third marriages end in divorce.

Planning

I’ve written about things to consider when planning for divorce before. The divorce statistics mentioned above really call for you to set up a divorce plan. A divorce plan should reflect goals, and the USA Today article has some excellent things to consider.

Get a planner

While most people run to a marriage counselor, what you may really need is a financial planner. Research shows that when the “money spouse” dies (typically the male partner), the “non-money spouse” ends up firing her investment manager over two-thirds of the time.

Review your Documents

Review your trust agreement every few years; if you don’t have a trust, get one. You may quickly realize your trust is outdated and go through a costly revision at just the time when you don’t need the added headache and hassle.

Keep 401(k) and IRA beneficiary forms. The bank may lose your beneficiary forms through the passage of time and through mergers and acquisitions.

Use a virtual binder

Consolidate your financial life on an aggregator.  Think of an aggregator as a virtual binder with a vault. All of your assets and liabilities feed into this software, and you have a real-time picture of your net worth and income from all sources.

Get a Postnup

These days, the postnup has become more important than ever. People are marrying when they are older, and better informed about the implications of marriage. Many people have married before. Because the divorce statistics for second and third marriages shown above are so high, more people are looking to sign postnuptial agreements.

The USA Today article on how to set up a divorce plan is here.

 

Goin’ Down for a South Park Prenup

Posted by Ron Kauffman on

When your marriage is no longer ‘awesome-o’, and your house cannot be described as a ‘Casa Bonita’, what do you do? If you’re Trey Parker, co-creator of South Park, you file for divorce, ask for joint custody, and enforce your South Park prenup.

South Park Prenup

Fishsticks

According to documents obtained by TMZ, Trey Parker recently filed for divorce from his wife, Bookie Parker, a former exotic dancer. The parties were married in 2014, and Trey lists their date of separation as February 28, 2019.

Trey filed the divorce petition in Los Angeles, and they had one daughter together before getting married. Their daughter may have worked on the show, voicing the character Ike, Kyle’s adopted Canadian brother.

Parker, who also co-created Broadway Smash “The Book of Mormon” with long-time creative partner Matt Stone, was previously married to Emma Sugiyama. The couple divorced after two years of marriage.

Parker, 49, asks for his daughter’s legal and physical joint custody. He is also seeking to terminate spousal support on the basis of the couple’s prenuptial agreement.

Lucky for Trey, he reportedly has a prenuptial agreement. These days, the prenup has become more important than ever. People are marrying when they are older, and more people are better informed about the implications of marriage.

And for people like Trey Parker, they are marrying a second time. Like Trey, more people marrying a second time look to have a prenuptial agreements prepared.

Florida Prenuptial Agreements

Prenuptial agreements aren’t just for wealthy Hollywood people like Trey Parker, entering second marriages, they are important for any couple planning to marry. I have written extensively on prenuptial agreements.

A prenup can help keep your non-marital property yours. The property you brought into the marriage is yours – mostly. But over time it is common for people to start mixing things up. Inheritance funds get deposited into joint accounts; properties get transferred into joint names…and all for good reason.

Unfortunately, tracing commingled property is expensive, and hard to prove. But, if you put it in writing at the beginning, you might be able to avoid this task, and save some money down the road.

Prenuptial agreements also help you to change the law. For example, right now in Florida, there were two bills recently introduced at the Legislature, and an ongoing debate, about alimony. When you go to court, a judge has to follow state law regarding alimony.

However, through prenuptial agreements you can modify Florida’s legal standards for awarding alimony, you can terminate it outright in many instances, in addition to modifying what the current law says about the amount of support and the duration of the alimony period.

Second Marriages

This is a second marriage for Trey. For second marriages, a prenup is an especially good idea. What some clients don’t realize is that going through a second, third, or fourth divorce can be more complicated than first-time divorces.

In multiple divorces, couples are older, and have less time to make up for losses. Also, couples are competing for dwindling resources. Child-support, alimony, and dividing up of the retirement accounts may still be pending, and there can be little left to divide in a second divorce.

Some can simply state what assets each party has brought into the marriage, and what assets each party will take away if the marriage ends. Or, if there is a disparity in incomes, you can add to the contract how much the lower-income spouse will receive.

Imaginationland

As noted in the article, Trey is asking the court to enforce the prenuptial agreement he signed with Boogie Parker enforced. Trey has a net worth estimated to be $500,000,000 from his ventures as the co-creator of South Park and play The Book of Mormon among others.

Trey’s first marriage to This is also Parker’s second marriage after previously being married from 2006 to 2008.

The New York Daily News article is here.

Image attribution Gage Skidmore

 

Heartbreak Postnuptial Agreement

Posted by Ron Kauffman on

Lisa Marie Presley, daughter of rock legend Elvis Presley, is as happy as a ‘hound dog’. A judge in her divorce from Michael Lockwood recently ruled that her postnuptial agreement waiving alimony is valid.

postnuptial agreement

Are You Lonesome Tonight?

Although she is single, the daughter of music legend Elvis Presley is not without her riches. The family court ruling means she won’t have to pay her estranged husband spousal support, according to court papers obtained by TheWrap.

In an order handed down Aug. 17, a judge found that a 2007 post-nuptial agreement signed by Presley and Lockwood in which they waived spousal support in the event of a split, is valid.

The Wonder of Postnuptial Agreements

I’ve written about various marital agreements before. Postnups are written agreements signed after a couple gets married, or have entered a civil union, to settle the couple’s affairs and assets in the event of a separation or divorce.

Postnuptial agreements are enforceable in divorce cases. But, there are two separate grounds by which either spouse may challenge such an agreement and have it vacated or even modified.

First, a spouse may set aside or modify an agreement by establishing that it was reached under fraud, deceit, duress, coercion, misrepresentation, or overreaching.

The second ground to vacate a settlement agreement contains multiple elements. Initially, the challenging spouse must establish that the agreement makes an unfair or unreasonable provision for that spouse, given the circumstances of the parties.

To establish that an agreement is unreasonable, the challenging spouse must present evidence of the parties’ relative situations, including their respective ages, health, education, and financial status.

With this basic information, a family court judge may determine that the agreement, on its face, does not adequately provide for the challenging spouse and, consequently, is unreasonable.

In making this determination, the trial judge has to find that the agreement is “disproportionate to the means” of the defending spouse. This usually requires some evidence to establish a defending spouse’s financial means. Additional evidence may also be necessary.

Keep in mind that this standard for avoiding or modifying the agreement happens when a couple is not in the midst of litigation against each other. This does not govern marital settlement agreements entered into during the course of divorce litigation.

Return to Sender

According to the papers, the agreement was arrived at the year after Presley and Lockwood married, and before the couple’s twins were born.

The order purportedly said that the post-nuptial agreement stated that:

“in the event of a judgment of nullity, legal separation or dissolution of marriage, neither party shall be obligated to pay spousal support to the other.”

The court added that Lockwood didn’t read this because it didn’t interest him, but he signed documents containing that language, twice, initialing every page on the July 2007 copy, and his attorney “signed the November 2007 version.”

Viva las agreements. The Wrap article is here.

 

When to sign a Prenuptial Agreement

Posted by Ron Kauffman on

More and more people are using prenuptial agreements. The belief that a prenuptial agreement is only for the rich and famous is fading away. Increasingly, prenups are becoming more widely used. But can the timing of the prenup be an issue?

Prenuptial Agreement

Florida Prenuptial Agreements

These days, the prenup has become more important than ever. People are marrying when they are older, and better informed about the implications of marriage. Many people have married before. So, more people look for prenuptial agreements.

Prenuptial agreements aren’t just for people entering second marriages, they are important for any couple planning to marry. I have written extensively on prenuptial agreements.

A prenup can help keep your non-marital property yours. The property you brought into the marriage is yours – mostly. But over time it is common for people to start mixing things up. Inheritance funds get deposited into joint accounts; properties get transferred into joint names…and all for good reason.

Unfortunately, tracing commingled property is expensive, and hard to prove. But, if you put it in writing at the beginning, you might be able to avoid this task, and save some money down the road.

Prenuptial agreements also help you to change the law. For example, right now in Florida, there has been an ongoing debate about alimony. When you go to court, a judge has to follow state law regarding alimony.

However, through prenuptial agreements you can modify Florida’s legal standards for awarding alimony, in addition to modifying what the current law says about the amount of support and the duration of the alimony period.

Second Marriages

For second marriages, a prenup is an especially good idea. What some clients don’t realize is that going through a second, third, or fourth divorce can be more complicated than first-time divorces.

In multiple divorces, couples are older, and have less time to make up for losses. Also, couples are competing for dwindling resources. Child-support, alimony, and dividing up of the retirement accounts may still be pending, and there can be little left to divide in a second divorce.

Some can simply state what assets each party has brought into the marriage, and what assets each party will take away if the marriage ends. Or, if there is a disparity in incomes, you can add to the contract how much the lower-income spouse will receive.

Timing of Prenups

But many people are afraid of prenups. They are afraid prenups take the romance out of getting married. That’s too bad. As I’ve written about before, there are a lot of concerns prenups can handle:

  • Will you have to care for an older parent
  • Who pays or supports the house when going back to school
  • Agreeing to spending habits
  • Who pays for what credit card debt
  • Who handles the costs of a business
  • Who pays the taxes
  • What happens if someone dies or becomes disabled

The truth is that prenuptial agreements can put a damper on things because people wait too long to address them. Clients make appointments for a prenup a few days before the wedding.

As a result, there may not be sufficient time to prepare and review the agreement, and it could be challenged as unfair.

If you want a prenuptial agreement, then talk to your future spouse about one at the beginning. Being upfront about your needs, and not springing it on them at the last minute is proper planning. Proper planning and allowing a lot of time will protect the agreement accusations of undue pressure.

If the prenuptial agreement is drafted, signed and put away long before the wedding, you will better protect yourself, and have some protection against challenges about bad timing.