To Sign or Not to Sign: The Prenup Dilemma

Pre-nuptial agreements are so commonplace today that no one gives them a second thought.  They are considered de rigueur in second marriages, particularly where there are children from a first marriage, who panic at the first sign that good ol’ dad has a girlfriend. They are also regularly used when a 50-year old wealthy bachelor moves his 25-year old girlfriend into his home. Ah…young love…

Their purpose is to protect a spouse’s assets from attack by their new partner if the relationship breaks down, and often they provide that upon separation, the wealthy spouse will not pay spousal support to the other.

But do they offer the protection the monied spouse is seeking, and what happens if your partner refuses to sign one?

Prenups are, of course, simply contracts, but unlike commercial contracts, courts look at prenups differently. When a couple begin living together or get married, there should be no expectation that each of them automatically has an interest in the other’s property or can expect to be supported by their new partner.

However, there comes a time when a couples’ lives are so intertwined that the law recognizes and provides for the sharing of property and in many cases, spousal support. Some of the factors include the birth of children, the sharing of childcare, the pooling of financial resources, the length of the relationship, and the many  non-financial contributions  each makes based on their abilities and skills.

In the usual prenup scenarios, if dad’s second marriage lasts as long or longer than his first, the prenup signed at the outset may be difficult to enforce. Our bachelor with the young girlfriend may find that after she has two children and is no longer participating in the job force, the contract they signed is simply unfair to her.

Often clients will make an appointment to discuss their desire for a prenup, but frequently it is a subject they have not yet raised with their partner. While prenups are not terribly expensive, to instruct a lawyer to draft one is rather foolish unless one has broached the issue with one’s sweetheart.

Case in point: New York executive,  Yiri Sun, is a Princeton graduate and vice-president of a large insurance company. She was very excited about her wedding day. She had booked a beautiful venue, the catering was top-notch, her bridal gown was exquisite, and the invitations sent.

At the last minute she was forced to call off the wedding as she refused to sign the prenup that was presented to her. Instead of losing her $8,000  reception deposit, she decided to turn her wedding into a party for 60 needy children and their families, referred to her by  the Salvation Army. She hosted the event wearing her wedding gown.

Ms. Sun’s professional status clearly gave her the confidence to call off the wedding when she saw the terms of the contract. Most women presented with prenups simply sign them. The good news for them is that if their relationship is not short, and they have made life choices that prejudice their financial well-being, they may be able to convince a judge to overrule the prenup.

As I tell my clients, prenups are a short-term solution, that in the long-run may not meet their expectations.

Lawdiva aka Georgialee Lang

Guest Post: The Most Expensive Divorces Ever

Everyone knows that divorce can be an expensive process, but some of the sums involved in the world’s most expensive divorces are truly eye-watering.

Expensive divorces have been in the news recently with the Russian oligarch Dmitry Rybolovlev being forced to pay his former wife $4.5 billion in what has been called the “most expensive divorce in history”.

The order came from a Swiss court, with Elena Rybolovlev’s divorce solicitors branding it a “complete victory”. Her former husband is now set to lose half of his wealth.

Dmitry Rybolovlev’s spokesperson Serget Chernitsyn argued that the divorce was a “win” for him, although his lawyers are said to be launching an appeal. Query why Mr. Rybolovlev would appeal if he won his case? Pure bafflegab!

The couple was married for 23 years and it took six years for the case to be completed. Rybovelev made his money from the potassium fertilizer industry and is the owner of the Monaco Football Club. He is also famous for buying the Palm Beach Maison de L’Amitie from Donald Trump for chump change, around $95 billion!

THE DIVORCE OF MURDOCH AND DENG

Controversial media tycoon Rupert Murdoch’s 2013 divorce from Wendi Deng cost him a reported $1.8 billion even though he had a pre-nuptial agreement. This gives you an idea that prenps may not be everything they are cracked up to be, particularly if a couple’s circumstances change and children enter the picture.

They were married for 14 years and it is likely the payout to Ms. Deng was so high due to the needs of their daughters’, among other reasons. Deng, who is almost 40 years his junior, hit the headlines when she slapped a protestor who threw a pie at her husband during the phone-hacking enquiry in 2011.

Murdoch married Deng just two-and-a-half weeks after his previous marriage was finalised in 1999 with the help of divorce lawyers. He also paid a bundle to his first wife!

THE WILDENSTEIN’S DIVORCE

The 1997 divorce of Alec and Jocelyn Wildenstein cost an estimated $2.5 billion. Alec was from a family of famous art dealers and their divorce was seen as a huge scandal. Things turned sour when Ms. Wildenstein caught her husband in bed with a young Russian model.

Alec then, wielding a gun, threatened his wife and for his trouble spent a sleepless night in the local jail. Judge Marilyn Diamond, who presided over the divorce proceedings received a number of death threats.

Judge Diamond told Jocelyn that she could not use the alimony payments for cosmetic surgery, as by this time Ms. Wildenstein’s multiple surgeries led to her nickname “The Cat Woman”.

The Court gave her $2.5 billion and $100 million every year for 13 years after. Alec Wildenstein died in 2008 leaving his young Russian widow.

ECCLESTONE PAID BY FORMER WIFE

Formula One tycoon Bernie Ecclestone raised eyebrows when it was made public that he was being paid by his ex-wife following his 2009 divorce.

Documents recently released showed that Ecclestone was receiving $100 million dollars each year from his former wife Slavica’s trust fund. Information about how long the payments would continue have not been made public.

It’s said that this divorce was worth $1.2 billion, placing it high in the top ten divorces in history. Ecclestone is one of the sporting world’s most controversial figures and famously paid a significant sum to escape bribery charges in spring 2014.

It seems the richer you are, the harder you will fight to retain your wealth. Quite amazing to realize that these couples could not in a lifetime spend all the money they have.

“Money often costs too much.” –Ralph Waldo Emerson

This post was GUEST AUTHORED by RIX AND KAY, Family law solicitors from Sussex, Brighton, East Sussex and Kent in the UNITED KINGDOM, an experienced team of barristers and solicitors.

GUEST POST: Is a Prenuptial Agreement Right For You?

The Prenup is one of the most controversial, heavily litigated, and publicized types of agreement that lawyers draft.

Thanks to Hollywood movies, with big-name actors, pretty much everyone in the world knows about Prenuptial agreements. Two films that come to mind are “Liar, Liar” with Jim Carey, and “Intolerable Cruelty” with George Clooney and Catherine Zeta Jones.

But the star of these movies is not who you might think… It’s the Prenup! In Intolerable Cruelty, the movie centers around a famous, patented Prenup, legendary because no lawyer has ever defeated it. Thanks to pop culture, real-life cases, and water cooler gossip, Prenups have reached mythical proportions.

THINGS TO CONSIDER

Whether you feel a Prenup is right for you will depend on your personal, financial, and legal considerations. The most compelling issue to consider is whether a Prenup will create bad will with your soon-to-be significant other. Many people believe that a Prenup is a bad sign, a predictor of future problems that may doom your mutual confidence in a successful marriage.

This is true, particularly if you have limited assets and you want a Prenup to protect future earnings. A bona fide financial reason for a Prenup is the existence of extensive personal or family assets. Many “moneyed” families are especially concerned about keeping wealth within the family. Immediate family may exert pressure on son or daughter to have a Prenup – to avoid the worry of depleting family wealth through successive marriages that result in divorce.

Other people who have been “burned” in a previous marriage may vow never to marry again without one. Most who are curious about a Prenup come with a mix of reasons, and ultimately only a small percentage of those people feel compelled to follow through with an agreement: signed, sealed and delivered!

THE DETAILS

Prenups are expensive and cumbersome to put together and that is the biggest hurdle for many people. We are not talking about a $100.00 office supply form. A proper Prenup that can later stand up to a divorce attorney determined to tear it asunder, could consume several thousand dollars and dozens of hours. For legal agreements that will govern a future divorce, a “good job” is based more on “process” than content.

In other words, it is not all about the agreement you end up with, it is more about the way you came to that agreement. For example, an agreement signed two days before you start the wedding ceremony is most likely not worth the paper it is written on.

And if the person with no money has no idea of the extent of the other person’s assets, that creates some serious enforceability issues. A good Prenup is an enforceable Prenup – and that involves tedious, detailed work ensuring proper disclosure, opportunity to consult with attorneys, and adequate time to “reflect” on the pros and cons. Many people bow out of the process when faced with the rigorous requirements and the cost.

A ‘GOOD’ PRENUP
The best argument for a Prenup is when both sides have something they want to protect, and both people have equal bargaining power. Those agreements tend to cause the least hurt feelings and do not tend to have enforceability problems.

For example, when both future spouses have wealth, are well-educated, have a good future on their own, and each spouse wants to protect themselves in the case of an unexpected divorce.

A ‘BAD’ PRENUP
The worst reason for a Prenup is when both spouses have insignificant assets and one spouse-to-be wants to keep their potential financial success to themselves. This scenario is guaranteed to bring bad feelings, problems with enforceability, and cause problems within the marriage.

No matter what your reasons, a Prenup is a highly personal decision. There are many benefits and pitfalls. The mere mention of an agreement can doom your marriage before it even begins. For many people, the cost of a proper Prenup diverts valuable resources away from your new beginning, at a time when resources may be low.

But if your reasoning and thinking are sound, a Prenup can be one of the most productive agreements you have ever used.

GUEST BLOGGER HOWARD IKEN – https://plus.google.com/107527542855253757745?rel=author is the Managing Attorney at AYO AND IKEN PLC and an experienced divorce attorney. Ayo and Iken PLC serve those in need of Orlando divorce attorneys – http://www.myfloridalaw.com/orlando-divorce-attorney/