"Premarital Agreement Checklist - Willick Law Group"

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Premarital Agreement Checklist
G
Make sure that you discuss, negotiate, and enter into an Agreement well in advance of
the wedding. Last minute Agreements are more difficult to enforce.
G
The key elements to creating a valid, enforceable Agreement are full disclosure and the
opportunity for both parties to consult with independent counsel. It’s important to
disclose all assets and income; Nevada courts impose a fiduciary duty on parties who are
engaged. If it’s relevant, ask about the difficulties involved in valuing a closely held
company.
G
The Agreement should include a clear statement of respective rights on divorce or death
of one of the parties; consider increasing the level of compensation to the less wealthy
party over time, based on the length of the marriage and the parties’ potential increase
in wealth; this will help prevent claims of unconscionability or overreaching.
G
Financial issues that could be addressed, and should at least be considered, include:
!
What already-existing property will be retained as separate or premarital property
(e.g., business interests, investment accounts, real estate)?
!
Will spousal inheritance rights be waived (i.e., will existing or future children, or
others inherit the property, instead of the spouse)?
!
Will appreciation of existing property be considered separate property or community
property?
!
Will earnings during the marriage be considered separate property or community
property?
!
Will there be alimony/maintenance in the event of divorce? Do you wish to specify,
limit, or restrict what amount or duration of alimony might be awarded by a divorce
court?
!
Who will own separate property commingled with community property, or community
property commingled with separate property?
!
Who inherits what if one party dies during the marriage?
!
Do you wish to make advance arrangements for child support? Agreements that
address child support are not binding on the court, but can be upheld if they meet the
reasonable needs of the child, and you can agree to items (such as college expenses)
that could not be ordered unless you agreed to them.
G
Both parties cannot be represented by one attorney. Separate counsel should be
Premarital Agreement Checklist
G
Make sure that you discuss, negotiate, and enter into an Agreement well in advance of
the wedding. Last minute Agreements are more difficult to enforce.
G
The key elements to creating a valid, enforceable Agreement are full disclosure and the
opportunity for both parties to consult with independent counsel. It’s important to
disclose all assets and income; Nevada courts impose a fiduciary duty on parties who are
engaged. If it’s relevant, ask about the difficulties involved in valuing a closely held
company.
G
The Agreement should include a clear statement of respective rights on divorce or death
of one of the parties; consider increasing the level of compensation to the less wealthy
party over time, based on the length of the marriage and the parties’ potential increase
in wealth; this will help prevent claims of unconscionability or overreaching.
G
Financial issues that could be addressed, and should at least be considered, include:
!
What already-existing property will be retained as separate or premarital property
(e.g., business interests, investment accounts, real estate)?
!
Will spousal inheritance rights be waived (i.e., will existing or future children, or
others inherit the property, instead of the spouse)?
!
Will appreciation of existing property be considered separate property or community
property?
!
Will earnings during the marriage be considered separate property or community
property?
!
Will there be alimony/maintenance in the event of divorce? Do you wish to specify,
limit, or restrict what amount or duration of alimony might be awarded by a divorce
court?
!
Who will own separate property commingled with community property, or community
property commingled with separate property?
!
Who inherits what if one party dies during the marriage?
!
Do you wish to make advance arrangements for child support? Agreements that
address child support are not binding on the court, but can be upheld if they meet the
reasonable needs of the child, and you can agree to items (such as college expenses)
that could not be ordered unless you agreed to them.
G
Both parties cannot be represented by one attorney. Separate counsel should be
suggested, preferably in writing, and the Agreement should document that it was
suggested. Cases have shown that courts are more likely to enforce an Agreement when
both parties actually saw independent counsel, as opposed to those cases where one party
or the other decided not to see a lawyer before signing.
G
Each party should meet separately with his or her attorney, away from the other party and
attorney, to discuss the terms and meaning of the Agreement. This helps prevent later
allegations of coercion.
G
It is best if each party chooses his or her own attorney; problems may result if the
wealthier party chooses or even suggests an attorney for the other party, although we can
easily suggest a list of attorneys who practice in this field if desired. It also is best
(although not required) if each party is responsible for his or her own attorney’s fees.
G
Both your file and your attorney’s file should document the negotiation process,
retaining copies of correspondence and drafts of the Agreement to show — in particular
— changes made at the request of the other party. A record of active negotiation
enhances the likelihood that the Agreement will be upheld. Such documentation might
include the parties’ handwritten responses to questions, recorded dialogue between the
attorneys and parties at the time of the signing by a court reporter, and/or a videotape of
the signing and of an attorney-client discussion about disclosure and the voluntary nature
of the drafting process.
G
The Agreement should document the parties’ levels of education, experience in business
and legal matters, and prior marriages.
G
Consider alternatives to an Agreement, such as the establishment of an inter vivos trust
before marriage or the keeping of separate accounts during marriage. For Jewish clients,
consider a clause stating that the parties agree to cooperate in obtaining a Get (a religious
divorce), in the event that the marriage is dissolved.
G
If the attorney for either party thinks the Agreement may be unenforceable, the attorney
may write a letter to the client describing the possible problems, or even signing the
document "approved as to form only." This could endanger the Agreement’s validity if
challenged in later proceedings.
G
Each party should be provided with a copy of the Agreement.
W
L
G
ILLICK
AW
ROUP
3551 E. Bonanza Road, Suite 101
Las Vegas, NV 89110-2198
702-438-4100
P:\WP9\webcd\SAW4355.WPD; rev. June 22, 2004
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