Just about all brides and grooms mean it when they vow “til death do us part,” but the statistical fact is that there is about a 50/50 chance of a first marriage ending in divorce, and the chances of divorce are even higher for second marriages. So it is wise to hope for the best and plan for the worst, and the worst in this situation means divorce. And of course, nobody gets out of this life alive, and it is also a fact that many people have assets that they want to protect and children or grandchildren for whom they would like to provide, especially people being married for the second time. If you are going to get married, it is a good idea to consult with a qualified attorney about the advisability of having a pre-marital agreement (which also could be called a pre-nuptial or ante-nuptial agreement). The following information cannot take the place of consulting with a lawyer.

 Purposes of a Pre-Marital Agreement

• Protecting assets so at your death they will go to offspring of your previous marriage.
• Countering principles of law whereby certain events during the marriage could give your spouse a financial claim against your assets, including assets owned before the marriage.
• Avoiding the applicability of community property laws whereby your earnings during the marriage, and assets purchased with those earnings, would be owned jointly with your spouse and divided equally with the spouse in the event of divorce.
• Preventing debts incurred by your spouse during the marriage from being joint obligations that creditors could collect from you.
• Laying out the way in which finances and living expenses will be handled during the marriage.
• Avoiding confusion as to what funds will be used to pay pre-marital debts, payments on pre-marital assets, or child support or spousal maintenance owed to a prior spouse.
• Preventing your spouse from being able to be awarded alimony in the event of a divorce, except in very limited circumstances.
• Assuring that you and your spouse both understand what your rights and obligations to each other will be and how those rights and obligations will be applied in the event of a divorce or when one of you dies.
• Pre-determining what the terms will be in the event of a divorce, to avoid a hotly contested, vicious, and expensive court battle.
• Clarifying what provisions each of you will make for the other in your wills and estate plans.

 Purposes of a Pre-Marital Agreement

It is important to consult with a qualified lawyer about the appropriateness of a pre-marital agreement for you. The lawyer will explain what legal principles would apply to your financial relationship with your new spouse if you did not have a pre-marital agreement and how a pre-marital agreement could change those legal principles. The lawyer will help you decide whether you need a pre-marital agreement.

The lawyer will tell you much more than the following, but here are some points about pre-marital agreements to keep in mind.

• The pre-marital agreement must be signed before the wedding. An agreement signed after the wedding is a “post-nuptial agreement.” A post-nuptial agreement is not as likely to be honored in court, but if you do not have a pre-marital agreement, it may be better than nothing.
• The pre-marital agreement should not be signed too close to the wedding date. An Agreement signed shortly before the wedding is more likely to be challenged later. Besides, as the big day comes near, you want to be concentrating on things that are more fun.
• Both parties should have lawyers. One lawyer cannot represent or advise both of you. If you think you both have the same lawyer, it probably means one of you has a lawyer and the other has no lawyer at all. If one party has no lawyer, there is a good chance the court will set the agreement aside later if that party so requests.
• You must conduct your affairs in a way consistent with the agreement. For example, if the agreement says earnings during the marriage will not be community (joint) property, but all the funds are mixed up together in the same bank account, it is probable a judge would rule that the money was “transmuted” (lawyer talk for changed) into community property by what the law calls “co-mingling.”
• You each must reveal to the other all of your financial information - assets, earnings, debts, etc. - before the agreement is signed. This is called “disclosure.” Without it, a judge would be likely to set the agreement aside at the request of a spouse who signed the agreement while in the dark about the other’s finances. There is law that allows the parties to waive disclosure, but most lawyers think that waiving disclosure is too risky.
• If the agreement provides that the spouse waives the status of death beneficiary of a retirement plan (which otherwise would be automatic under a federal law known as ERISA), the pre-marital agreement itself is not enough. The spouse also must sign a waiver form provided by the retirement plan administrator after the wedding.
• If an agreement says that neither party can enter into debts that bind the parties jointly except with written consent of the other party, that provision is effective as a defense against a creditor only if the agreement has been recorded at the office of the county recorder. Otherwise, you can be jointly liable for your spouse’s debts incurred during the marriage under community property law.
• A will or estate plan signed before the wedding will in general be invalidated by the wedding.
• A pre-marital agreement needs to work together with a new estate plan that is consistent with the agreement and has been prepared by a qualified estate-planning attorney. Just saying in the pre-marital agreement that the spouse will be left a certain amount of money or certain assets is not the same as putting those terms into a will or a trust document.