Prenuptial Agreements

22 Oct

From www.mcgeepost.com .Copyright © 2012 Michael H. McGee. All rights reserved. Please feel free to share or re-post all or part non-commercially, hopefully with attribution.

I practiced law in North Carolina for many years. I’ve published two books on divorce law and specialized in separation and divorce law for more than ten years. So the issues I’m writing about today are of great concern to me. I no longer practice law, so don’t even think of asking me for legal advice. I only work with giving advice and assistance to other lawyers upon request.

Please permit me to talk about two aspects which arise out of prenuptial agreements. The first is “A Motive for Murder.” The second is “After the Love Has Gone.”

A Motive for Murder

There is a story line that over the years has circulated around on the various television crime dramas. I’ve seen two shows already this fall which used this story line. The first was on the premiere of Eric McCormack’s crime drama Perception. In this story, a wealthy man was murdered and there are the usual suspects. It finally comes out, due to the incredible perceptual skills of the lead character, that the man’s young trophy wife had murdered him. Why did she do it?

She murdered him because she had signed a prenuptial agreement before the marriage. In the event of a separation or divorce she would receive little of the wealth of her husband. But in the event her husband died, she would receive a great deal of his wealth through his estate. But only if no one knew she’d killed him. By law a murderer cannot inherit from someone she kills. In addition, she goes to jail for a very long time. Eric McCormack finally sees through the web of deceit she’s woven to protect herself. But she almost got away with it.

A prenuptial agreement is a contract signed before the marriage of two persons, which spells out in advance who owns which assets between the two and what will happen to the financial assets of the couple in the event of a separation or death, as well as what support may be due. It’s commonly used when one person has quite a bit more wealth than the other, or where both have wealth and want to eliminate confusion about who owns what after the marriage. Regular people may want prenuptial agreements as well, as a way of protecting whatever assets they may have.

This murder story is a regular on TV crime dramas, every year, and it even extends to some novels. This story line is lame. The prenup murder story needs to be retired and put out to pasture. Here’s why. Any lawyer who drafts a prenuptial agreement which does not waive each spouse’s right in the estate of the other is committing malpractice, unless the spouses intentionally and knowingly agree to omit such a waiver of rights. The “estate” is what a person has at the time of death, which is passed on to heirs.

So, people with money usually have competent lawyers handling their legal affairs. A competent lawyer would never permit his or her client to be put in the position, in an agreement, where murder was the best option. A prenuptial agreement where the wife gets nothing at the time of a divorce but gets everything at death is almost an absurd proposition. On the TV shows where this happens, the last portion of the show should be devoted to action showing the rightful heirs suing the attorney or firm which drafted the prenuptial agreement which provided the motive for murder, for malpractice and wrongful death.

Some states may not allow a waiver of all estate rights upon the death of a spouse. States which don’t allow a full waiver of such rights in a prenuptial agreement should change their laws to eliminate this motive for murder. I do know that in New York State, where Eric McCormack’s character lives, inheritance rights can be decided in a prenuptial agreement.

One part of an estate which all states should make sure cannot be waived in a prenuptial agreement is the “widow’s allowance.” This is a short-term monthly payment from the estate which is intended to make sure the surviving spouse does not have to suffer financial ruin just after the death of the deceased spouse. Also, many states allow a “widow’s rights,” which for example in New York is a maximum of $56,000 now, which should not be waivable. After all, most surviving spouses are not murderers, even if TV takes the opposite approach.

Other countries outside the US should also make sure they have laws allowing for prenuptial agreements. These countries should also review their laws on the subject to make sure their laws do not provide a motive for murder. There’s nothing worse than giving people good reasons to kill their spouse.

I’m a believer in the sacredness of marriage and family and the home. No one should have to watch their backs when they’re in the bosom of their family. This belief also goes to the subject of spousal abuse and child abuse, which is another discussion altogether.

Prenuptial agreements are entirely appropriate where one spouse has a lot more assets than the other one, even in a first marriage. With a second or subsequent marriage, the spouse with more assets needs to make sure his children and other rightful family members are provided for without interference from a spouse.

In any situation, there may be succession issues where the wealthier spouse has a managing interest in one or more businesses. Also, any spouse of the one who has more assets is likely to be more easily welcomed into the extended family if that spouse is not perceived as being someone who will take over the assets at some point in the future. Once time has passed and trust is established, people with severe prenuptial agreements can always modify their agreements to give the less affluent spouse more latitude.

After the Love Has Gone

The other situation is when wealthy husband and his less affluent bride sign a Prenuptial Agreement which says that in the event of a separation she gets little or nothing from him. Over the years they have a good life and love each other well. Gradually, though, they fall out of love and the wife feels ignored or neglected, or feels her husband is running around on her or being abusive to her.

She knows, though, that if she leaves him she will be completely out in the cold financially, and she’s gotten accustomed to the good life. She begins to feel she has to put on a good front and continue a loveless marriage. She feels she cannot leave her husband no matter what. Things in the home become false and distant. The husband spends so much time at work that he hardly notices. This situation can go on for years. Let’s make it clear both spouses are generally good people. There are no villains, only lonely or distant human beings.

How can the spouse with the assets make sure he will not end up in a loveless crumpled marriage where his own home becomes a place of distance, after the love has gone? The answer is surprisingly simple.

The spouse with the assets should at the time of the Prenuptial Agreement or just after the marriage deposit a sum of money into an account owned solely by the other spouse. The wealthy husband should make a gift to his wife of maybe five million dollars or more, either as a part of the agreement, or just after the wedding.

He could simply transfer the money to her, in her name alone, if he feels she is savvy about money. Otherwise he could set up an investment account or trust in her name alone, with the trustees charged to invest the money for her benefit. Those with lesser assets could transfer ten thousand dollars, or whatever amount won’t harm them, to their spouse’s name.

This would be the less affluent spouse’s freedom money. In a solid marriage there would be no need for her to flee. Yet if the occasion arises where the less affluent spouse feels the need to leave the marriage, he or she wouldn’t be forced to stay by lack of funds. Or if the less affluent spouse wants to do something the other spouse doesn’t want to do with them, the money would be there for the less affluent spouse to live more freely.

This marriage of freedom is the kind of marriage where true love and mutual respect can flower more freely. Each spouse is motivated to be attentive and loving to the other if they want the family to thrive. Love conquers all.

And yes, I am a romantic sap. I want husbands and wives to love one another. And if they can’t love one another, I want to see endings where the separation is not afflicted by a complete lack of power on the part of one party. It’s much more likely that a separation and divorce will go well and without massive anxiety if the ability of each to stand on their own is enhanced.

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