Drafting Premarital and Postmarital Agreements Strategies for - PowerPoint PPT Presentation

Presenting a live 90-minute webinar with interactive Q&A Drafting Premarital and Postmarital Agreements Strategies for Crafting an Enforceable Agreement WEDNES DAY, OCTOBER 2, 2013 1pm East ern | 12pm Cent ral | 11am Mount ain | 10am Pacific Today’s faculty features: Christ opher C. Melcher, Part ner, Walzer & Melcher, Woodland Hills, Calif. Pet er M. Walzer, Part ner, Walzer & Melcher, Woodland Hills, Calif. Richard G. Kent , Part ner, Meyers Breiner & Kent , Fairfield, Conn. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .

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D RAFTING 10/2/13 P REMARITAL AND P OSTMARITAL A GREEMENTS Strategies for Crafting an 5 Enforceable Agreement

P RESENTERS Richard G. Kent 10/2/13 Meyers Breiner & Kent Fairfield, Connecticut 203-255-9410 rkent@mbnllp.com Peter M. Walzer & Christopher C. Melcher Walzer & Melcher LLP Woodland Hills, California 818-591-3700 pmw@walzermelcher.com ccm@walzermelcher.com 6

O VERVIEW  Differences between premarital 10/2/13 agreements and postmarital agreements.  How to discuss and negotiate these agreements  Structuring the agreement  Choice/conflict of laws for multistate or international couples  Getting retained and paid 7

W HO N EEDS A P RENUP ?  A party who wants to protect 10/2/13 separate assets, such as family wealth from disputes on death or divorce.  A party who has a professional practice or other service business, and wants to avoid or limit a community interest.  The other party has substantial debt, or a support obligation from a prior marriage. 8

B ENEFITS OF A P RENUP  Promotes communication about finances 10/2/13 and expectations of each party before marriage.  Provides certainty as to their rights and obligations on divorce.  May increase trust about the other’s intentions.  May reduce chance of litigation on divorce. 9

W HAT A P RENUP C AN D O  Keep premarital property off limits 10/2/13  Fundamentally change the default rules re community property or equitable distribution.  Limit or waive spousal support/alimony.  Specify rights on death and to life insurance. 10

R ISKS OF P ROPOSING O NE  Neither party appreciates an 10/2/13 attorney’s intrusion into their idyllic expectations of love and marriage.  The subjects of death and divorce are the antithesis of expectations of love and marriage.  Agreements demonstrate a lack of trust.  Agreements dampen romance. 11

S OCIETAL V IEWS  Premarital agreements place 10/2/13 emphasis on the individual over the couple.  May hurt women more than men.  The wealthy may have an advantage over the less wealthy. 12

L EGAL E NVIRONMENT  Marriage is a highly regulated 10/2/13 institution, so there are limits on freedom of contract with respect to marital agreements. 13

H OW TO D ISCUSS A M ARITAL A GREEMENT  Talk to your fiancé 10/2/13  Work with a marital counselor  Use a mediator  Collaborative method  Have the lawyers broach the topic for the first time 14

3 K EY E LEMENTS TO A P RENUP  Timing 10/2/13  Disclosure  Independent Counsel 15

T IMING  How far in advance must the 10/2/13 agreement be presented? 16

D ISCLOSURES 10/2/13  What must be disclosed?  Can the right to disclosure be waived?  Attach disclosures to the agreement so there is no question what was disclosed.  The disclosure should give meaningful information about the party’s income, assets, and obligations.  Serve disclosures while agreement is being negotiated with sufficient time for review. 17

I NDEPENDENT C OUNSEL  Does the attorney have to certify the 10/2/13 agreement?  Is an attorney certification a waiver of the attorney-client privilege?  Is the attorney “independent” if paid by the other party?  Can a party waive the right to counsel?  What is required to show that an unrepresented party understood the prenup? 18

G ENERAL L EGAL R EQUIREMENTS  Must be in writing and signed by both 10/2/13 parties.  Statute of frauds exception?  Consideration not required (but is a good idea).  May agree on any matter regarding rights on death or divorce, not in violation of public policy. 19

P UBLIC P OLICY L IMITS  Child support. 10/2/13  Child custody.  Religious upbringing of children.  Support of a spouse during marriage.  Penalties for spouse not performing marital duties.  Unfaithfulness.  Immigration marriage?  Interspousal fiduciary duty? 20

B UILDING A S TRONG A GREEMENT  Avoid last-minute agreements. 10/2/13  Allow for changes.  Do not include provisions which violate public policy.  Follow the law in your state (e.g., the Uniform Premarital Agreement Act). 21

S TRUCTURING THE D EAL  Create a real bargain. 10/2/13  Is there incentive to challenge the agreement because there’s nothing to lose?  No contest clause?  Importance of recitals. 22

P ROPERTY I SSUES  No property vs. limited property rights 10/2/13 during marriage.  Lump sum payment?  Payment for each year of marriage?  Waiver of property rights in loan proceeds.  Waiver of rights resulting from efforts of spouse during marriage. 23

D EATH  Clients often forget that the property provisions 10/2/13 don’t just apply on divorce – they also apply equally at death.  Does the client really intend to disinherit the other spouse if the client dies while the marriage is intact?  Life insurance can be provided as a means of security. 24

R ETIREMENT B ENEFITS  Federal law controls 10/2/13  Need to have waiver of those rights executed after marriage. 25

S POUSAL S UPPORT /A LIMONY W AIVERS OR L IMITATIONS  Waiver vs. limitation? 10/2/13  Will the waiver be tested at time of execution of the agreement or at time of enforcement?  There may be a greater protection under the law for spousal support rights than marital property rights.  Include severability clause. 26

A LIMONY C HOICES  Allow court to set amount and duration, subject 10/2/13 to provisions in agreement.  Limit duration of support payable based on length of marriage?  Cap the amount which may be ordered by the court?  Requiring a minimum amount is risky because there may be no ability to pay. 27

C HOICE OF L AW  Be aware of interstate and 10/2/13 international law issues when parties are living in separate places or where they contemplate moving.  Complex area. Consult with local counsel as to whether the agreement would be enforceable in that jurisdiction. 28

E NFORCEMENT IN O THER J URISDICTIONS  Every state and country different. 10/2/13  Some countries do not honor premarital agreements.  Most countries have premarital regimes.  Advise client in writing to client you can only give advice on the law of your state. 29

D EFENSES  Unfairness is typically not a defense. 10/2/13  Duress.  Unconsionability  Procedural: The agreement was presented in a one- sided, take-it-or-leave-it fashion.  Substantive: The terms are so one-sided as to shock the conscience of the court.  Promotive of divorce?  Mistake of fact or law. 30