Prenuptial Agreements Are Good For Family Businesses

If you have a family business then read the following from The Williston Herald, Family roles play a part in farm operation, succession A family death brings questions about new roles:

"To help deal with in-laws, Hanson is now a firm believer in prenuptial marriage agreements.

'It's just good business management,' he said, while admitting there are two points of view on the matter.

The first point is from the view of the in-law, who wants to know why she/he should have to sign such a document in the first place, especially if that person helps work the operation.

To address this point, Hanson said to ask the in-law to think of what the family has done to build the business.

'The only way this farm will ever be successful is if this farm stays as a unit. If this farm is divided, sold, split off, no one wins,' Hanson said.

If a prenuptial agreement is done fairly, no one ever gets upset. In talking about the reasons behind the prenuptial agreement and its overall purpose, the new family member should understand and feel he/she has been treated fairly, he said.

Hanson is also a firm believer in prenuptial agreements for anyone entering a second marriage.

'If you think children have trouble settling an estate, wait until you have stepchildren,' he said."

If you need a lawyer for a prenuptial agreement, please give me a call.

Writing the Property Settlement - Make Sure You Cover Everything

Ah, forgetting to ask all the questions worries me. The problem of the unasked question has a tendency of coming back to haunt - if not to bite. For those of you thinking of doing your own divorce (or legal separation) agreements, I give you this paragraph from WOLSHIRE v. WOLSHIRE, 905 NE 2d 1051 (Ind Court of Appeals 2009) and suggest that you think long on it:

We reach the same conclusion with regard to the trial court's division of Husband's future military retirement benefits. Generally, a spouse's military retirement benefits are a marital asset subject to division. See, e.g., Griffin v. Griffin, 872 N.E.2d 653 (Ind.Ct.App.2007). Here, however, the parties entered an agreement that made no mention of Husband's benefits. When asked about this omission during the final hearing, Wife stated, "It simply did not come up as we were putting together this agreement. It was an oversight." (Tr. p. 20). As noted above, a trial court reviewing a settlement agreement "should concern itself only with fraud, duress, and other imperfections of consent, or with manifest inequities, particularly those deriving from great disparities in bargaining power." Pond, 700 N.E.2d at 1136. A mere oversight does not rise to this level. We instruct the trial court, on remand, to remove the provision concerning Husband's military retirement benefits from the decree of dissolution.

Islamic Prenuptial Agreements - A Case Out of Washington

The Google Alerts blurb caught my eye and I spent some time yesterday evening reading IN RE MARRIAGE OF OBAIDI.

Here are some of the facts:

Ms. Obaidi and Mr. Qayoum were married for approximately 13 months. At the time of the marriage, Ms. Obaidi was 19 and Mr. Qayoum was 26. Mr. Qayoum is a United States citizen and has lived in the United States since he was three. Ms. Obaidi is from Canada.

The parties are both children of Afghan immigrants and the couple was married according to Afghan custom. As part of these customs, the parties signed a "mahr" agreement during an engagement or Nikkah ceremony held on December 30, 2005. The Nikkah ceremony is a religious ceremony that is similar to a wedding reception at a typical Christian wedding. At some point during the Nikkah ceremony, Ms. Obaidi and Mr. Qayoum, along with a small group of family and friends, went into a smaller room. Verses from the Koran were read and Ms. Obaidi and Mr. Qayoum each swore to take the other as his or her spouse. As part of the ceremony, the parties signed the mahr.

A mahr is an agreement based on Islamic law under which a husband agrees to pay a dowry to his wife. Generally, there is a short-term portion and a long-term portion. The short-term portion is due immediately. The long-term portion is the amount that the wife is entitled to take with her in the event of a divorce. In the mahr at issue here, the short-term portion was $100 and the long-term portion was $20,000.

The Nikkah ceremony was conducted in Farsi, except when Mr. Aji-sab, who performed the ceremony, asked Mr. Qayoum if he wanted to marry Ms. Obaidi. Mr. Qayoum does not speak, read, or write Farsi. Mr. Qayoum has lived in the United States for all but two or three years of his life.He considers himself "American first." Report of Proceedings at 107. He explained that he went through the Afghan marriage process because his mother was concerned that he would lose even the small amount of cultural knowledge he had about Afghanistan.

Mr. Qayoum testified that he had never heard the word "mahr" before the day of the Nikkah ceremony. He acknowledged that he had previously attended a couple of receptions, but he stated that he was unfamiliar with the Nikkah ceremony. According to Mr. Qayoum, he was not informed of the Nikkah ceremony until 10 or 15 minutes before the event took place. At some point, Mr. Qayoum selected an uncle to act as his representative during the discussions that took place as part of the Nikkah ceremony.

Here is some of the Washington Court of Appeals' analysis:

A New Jersey case, Odatalla v. Odatalla, 355 N.J. Super. Ct. Ch. Div. 305, 309, 810 A.2d 93 (2002), provides a helpful framework for considering the application of state law to a mahr agreement. In Odatalla, the trial court ordered the specific performance of the mahr agreement. The husband appealed, arguing that review of the mahr by a state court was precluded under the doctrine of separation of church and state. The husband also argued that the agreement was not a valid contract under New Jersey law. Id.

The Odatalla court looked for guidance to Jones v. Wolf, 443 U.S. 595, 602-03, 99 S. Ct. 3020, 61 L. Ed. 2d 775 (1979), which explained the "neutral principles of law" approach that allows agreements to be enforced based on neutral principles of law, not religious doctrine. In Jones, a dispute over the ownership of church property was taken to a civil court in Georgia. The court set aside the separation of church and state issues by applying the neutral principles of law doctrine. Justice Blackmun explained, "We cannot agree, however, that the First Amendment requires the States to adopt a rule of compulsory deference to religious authority in resolving church property disputes, even when no issue of doctrinal controversy is involved." Id. at 605. In other words, the court determined that the controversy over the ownership of the property could be decided on neutral principles of law, not upon religious beliefs or policies. Id.

Based on Jones, the Odatalla court determined that the mahr did not violate the separation of church and state doctrine if the court could apply neutral principles of law to the enforce the mahr. Odatalla, 355 N.J. Super. Ct. Ch. Div. at 311. The court concluded that the mahr could be enforced by applying neutral principles of contract law. Id. at 312. Notably, the court found all the elements of a contract even though the husband argued that the mahr was too vague to apply because it did not state when the money would be due. Id. at 313. Because the court determined that the mahr was simply a contract between two consenting adults, the court concluded that the mahr was not against public policy. Id. at 314.

Here, we apply neutral principles of Washington law. However, the trial court found the wife was not abused, not unfaithful, and did not do anything to create a forfeiture of the mahr under Islamic law. The trial court also found that the husband was not unfaithful, but that he had initiated the separation without good cause.Consequently, the court erred by considering Islamic law or fault.

Applying the neutral principles of contract law, we can resolve this case by using these neutral principles of law, not Islamic beliefs or policies. We apply Washington law to resolve the issues of the formation and validity of the agreement.

And this appellate court hit on the issue that bothered me from the first paragraph of the opinion and which I think would apply here in Indiana:

The negotiations preceding the execution of the agreement were conducted in Farsi. Also, the document was written in Farsi which Mr. Qayoum does not read, write, or speak. Mr. Qayoum did not have the opportunity to consult with counsel although he was advised by his uncle, who is neither an attorney nor an expert in Islamic law, after the agreement was signed. Because Mr. Qayoum could not speak, write, or read Farsi, there was no meeting of the minds as to the terms of the mahr agreement.

Just as with any prenuptial agreement, handing the prenup to the other person just before the wedding is going to lead to an invalid agreement. But putting the agreement into a foreign language that the recipient cannot read? Not a good idea at all.

How To Approach The Prenuptial Agreement Idea

Esther Schonfeld wrote what I think is perfectly sensible way to approach prenuptial agreements:

While not an antidote to a difficult divorce, a prenuptial agreement certainly can make divorce less painful. I often describe prenups as insurance policies that protect against a protracted and brutal divorce proceeding. Prenuptial agreements provide a realistic alternative to a messy divorce by allowing both spouses to determine their own financial fates at the outset of the marriage. Difficult as it may be to discuss money and the possibility of divorce before the marriage has even commenced, doing so can sometimes prevent a considerable amount of future heartache.

Indiana Prenuptial Agreements - Setting them Aside for Fraud or Unconscionability

Let us go back to 1996 and Rider v. Rider, 669 NE 2d 160 for a description of unconscionability:

In this case, there is no evidence of fraud, duress, misrepresentation, or unconscionability at the time the contract was made. Leslie brought most of the property to the marriage; Charles brought few personal assets and a modest income from more than 35 years of work at the Delco Remy factory. Both were looking to protect their assets for themselves and for their heirs. Thus, the couple entered into an antenuptial agreement which would provide this protection. Even though at the time of marriage one spouse was close to retirement age and the other spouse had recently undergone several surgeries, the agreement was silent regarding support in the event that one spouse would become disabled. Given these circumstances, if such support had been important to either of the parties, surely it would have been included in the agreement. Rather, the agreement specifically stated that if the parties separated, neither would be entitled to support.

As discussed above, the trial court found that Leslie has assets worth between $65,000 and $85,000. However, due to her illness and her inability to work, she is not capable of supporting herself. Thus, the trial court found that the agreement is "not binding" with regard to maintenance, and awarded Leslie $225/mo. The Court of Appeals agreed, finding that "[a]n antenuptial provision limiting or eliminating spousal maintenance is unconscionable and will not be enforced when it would deprive a spouse of reasonable support that he or she is otherwise unable to secure." Rider, 648 N.E.2d at 665.

However, both the trial court and the Court of Appeals failed to consider the relative financial positions of the spouses. Unconscionability involves a gross disparity. See Justus, 581 N.E.2d at 1272. Thus, while an antenuptial agreement which would force one spouse onto public assistance may be unconscionable, we believe that a finding of unconscionability requires a comparison of the situations of the two parties. At the time of divorce, Leslie's assets were worth at least $65,000, and she received $645/mo. child support from a prior spouse. Charles had personal assets which were worth only several thousand dollars and a pension which paid a gross $1,247/mo. Enforcement of the antenuptial agreement would leave one spouse with virtually all of the real and personal property, while leaving the other spouse with a modest income stream. This is what the parties brought into their short marriage, and this is what they sought to protect. The alternative, as ordered by the trial court, would provide Leslie with almost all of the property and a significant percentage of the income stream. Given Charles' limited financial position, we do not find enforcement of the parties' own agreement to be unconscionable.

We agree with the trial judge that Leslie should continue to pursue her claims for disability and social security. While we sympathize with her, and we understand that enforcement of this contract eventually may force her to sell her home, we cannot find enforcement of this antenuptial agreement to be unconscionable. Finally, we note that this case does not involve a situation where, following divorce, one spouse is left with considerable assets while the other spouse is left virtually penniless, with no means of support. 165 Rather, in this case, one party is left with a modest income stream, while the other party is left with a modest amount of real and personal property.

And to 1997 and the Indiana Court of Appeals' decision in Pardieck v. Pardieck, 676 NE 2d 359:

Finally, we address the trial court's creation of a "good faith" exception to the enforcement of an otherwise valid antenuptial agreement. The court concluded that it could set aside the agreement "where one of the parties did not act in good faith throughout the course of the marriage, using the antenuptial agreement in an unconscionable fashion to shield what would normally be marital assets." Record at 127.

Even accepting the trial court's finding that Gregg acted in bad faith during the marriage, we decline to create a new exception to the enforcement of an otherwise valid antenuptial agreement.[2] Indiana law does not require that a general duty of good faith and reasonableness be implied in every contract. See First Federal Savings Bank v. Key Markets, 559 N.E.2d 600, 604 (Ind.1990) (not court's province to require party acting pursuant to unambiguous contract to be "reasonable," "fair," or show "good faith cooperation"). To the contrary, when a court finds a contract to be clear in its terms and the intentions of the parties apparent, the court will require the parties to perform consistently with the bargain they made. Id.[3]

Here, the contract terms are clear and unambiguous. The assets Gregg listed in Exhibit A, including the Parkland, Inc. stock, are his separate property and are not subject to division. As stated earlier, this necessarily includes the assets accumulated by Onyx Paving, Inc. Julie does not have access to the wealth accumulated by her husband under Parkland, Inc. While that result may now seem harsh after 11 years of marriage, Julie freely entered into the antenuptial agreement, and the agreement was not unconscionable at the time of dissolution. As a general rule, the law allows persons of full age and competent understanding the utmost liberty to contract, and their contracts, when entered into freely and voluntarily, are enforced by the courts. Pigman v. Ameritech Publishing Inc., 641 N.E.2d 1026, 1029 (Ind. Ct.App.1994). Thus, we conclude that the trial court erred when it refused to enforce the antenuptial agreement according to its terms.

A Brief History of Prenuptial and Postnuptial Agreements - Indiana and Elsewhere

Thank Google Scholar for this post. While doing some research I ran across Lifting the Veil of Ignorance: Personalizing the Marriage Contract, 73 Ind. L.J. 453 (1998). I suggest anyone having any opinions on our current family law system to give this a careful reading - some history, some statistics that might not be commonly known. Also, the writers avoid the usual dry as dust, insomnia inducing writing of most academics.

In all of that, the writers give a history of marital agreements and why few entered into prenuptial or post-nuptial agreements (on the way to proposing some interestingly unique ideas for reform).

Back in 1996, the Indiana Supreme Court handed down Rider v. Rider, 669 NE 2d 160, that gave this history of prenuptial agreements:

Antenuptial agreements are legal contracts which are entered into prior to marriage which attempt to settle the interest each spouse has in property of the other, both during the marriage and upon its termination. This court has long held antenuptial agreements to be valid contracts, as long as they are entered into freely and without fraud, duress, or misrepresentation, and are not unconscionable. See Mallow v. Eastes, 179 Ind. 267, 100 N.E. 836 (1913); Kennedy v. Kennedy, 150 Ind. 636, 50 N.E. 756 (1898); and McNutt, v. McNutt, 116 Ind. 545, 19 N.E. 115 (1888). These early cases drew a distinction between agreements which took effect upon the death of a spouse as opposed to those which took effect upon dissolution of the marriage. Those antenuptial agreements which involved application upon the death of a spouse were "favored by the law as promoting domestic happiness and adjusting property questions which would otherwise often be the source of fruitful litigation." Buffington v. Buffington, 151 Ind. 200, 51 N.E. 328, 329 (1898). However, the courts took a rather dim view of antenuptial agreements which limited the legal obligation of support upon dissolution of the marriage. Watson v. Watson, 37 Ind.App. 548, 77 N.E. 355 (1906).

Since these turn of the century cases, the number of subsequent marriages in our society has increased substantially. See In re Marriage of Boren, 475 N.E.2d 690, 693 (Ind. 1985). Individuals, especially those who have children from previous marriages, may wish to protect their property interests upon entering into a marriage. Id. at 694. In Boren, we concluded that policy reasons no longer compel us to find antenuptial agreements which take effect upon divorce to be void per se. Further, we held that the same traditional contract tests which apply to antenuptial agreements which take effect upon the death of a spouse also apply to antenuptial agreements pertaining to the dissolution of marriage. Id. Boren was the last time we addressed the issue of the validity of antenuptial agreements.

Since Boren, our Court of Appeals has had several occasions to address this issue. The leading case is Justus v. Justus, 581 N.E.2d 1265 (Ind.Ct.App.1991), trans. denied. In Justus, the Court of Appeals was presented with a situation where the couple entered into an antenuptial agreement freely, without fraud, duress, or misrepresentation. However, during the course of the marriage there was a change in circumstances, and the trial court would not enforce the agreement in its entirety. The Court of Appeals noted that

[a]s a general rule, a contract is unconscionable if there was a gross disparity in bargaining power which led the party with the lesser bargaining power to sign a contract unwillingly or unaware of its terms and the contract is one that no sensible person, not under delusion, duress or distress would accept. The doctrine of unconscionability necessarily looks to the time of execution.

Id. at 1272 (citations omitted).

However, the analysis did not stop there. The Justus court continued with a discussion of cases from other jurisdictions, focusing primarily on Newman v. Newman, 653 P.2d 728 (Colo.1982). In Newman, the Supreme Court of Colorado applied the above general contract analysis for property division, but would not do so for maintenance. For the latter, the Newman court found that such provisions may become voidable as unconscionable due to circumstances existing at the time of dissolution. 653 P.2d at 734-35.

163 In Justus, the Court of Appeals noted that we, in Boren, had cited approvingly to Newman. Further, the Justus court found that where enforcement of an antenuptial agreement would leave a spouse in the position where he would be unable to support himself, the state's interest in not having the spouse become a public charge outweighs the parties' freedom to contract. Justus, 581 N.E.2d at 1273. Therefore, the Justus court agreed that a court may look to circumstances at the time of dissolution to determine unconscionability of an antenuptial agreement.[2]

***

We are asked in this particular case to examine an antenuptial agreement which was not unconscionable when made, but due to a 164 change in circumstances would operate to create a financial hardship for one spouse. We note that in 1995 Indiana joined the growing list of states which have adopted the UPAA. Indiana's version of the UPAA reads in relevant part:

If a provision of a premarital agreement modifies or eliminates spousal maintenance and the modification or elimination causes one (1) party to the agreement extreme hardship under circumstances not reasonably foreseeable at the time of the execution of the agreement, a court, notwithstanding the terms of the agreement, may require the other party to provide spousal maintenance to the extent necessary to avoid extreme hardship.

I.C. § 31-7-2.5-8(b). The Indiana statute did not take effect until July 1, 1995, and is therefore not applicable to this case. Still, the adoption of the UPAA provides useful guidance regarding the question of unconscionability, and supports the trend of applying traditional contract law unless the agreement is unconscionable at time of dissolution.

And there we have a brief history of prenuptial law in Indiana.

Prenuptial Agreements - Why They Need Considering

Image via Wikipedia

I agree wholeheartedly with the sentiment of

Wedding Planning and the Prenuptial Agreement: Prenup Considerations Every Bride and Groom Should Know even if I quibble with some of the details:

Courts don’t make allowances for sentimental value, so if a bride wishes to keep her great-grandma’s quilt after a divorce, that treasured quilt needs to be protected from the community assets of the marriage. The same would apply to the groom’s cherished Stratocaster guitar or to a multitude of other personal belongings that are valuable or likely to appreciate in value during the marriage.

The Los Angeles Times published Love me, love my credit score:

Passion often blinds sweethearts to the fact that matrimony is, at bottom, a contract. Figuring out how that partnership can prosper is critical for a successful union. Yet financial differences rank among the greatest sources of marital misery, in part because talking about money before you tie the knot makes many couples uncomfortable.

Some worry that prying into each other's finances might indicate a lack of trust, or that a prenuptial agreement is a self-fulfilling prophecy for splitting up.

In fact, experts say, just the opposite is true. Spouses who find themselves bickering about finances early in their marriage could well end up hashing out the same issues in divorce court, according to Tina Tessina, a licensed psychotherapist and author of "Money, Sex & Kids: Stop Fighting About the Three Things That Can Ruin Your Marriage."

And then there is Prenuptial agreements and marital trusts are unromantic, but important from The Palm Beach Daily News:

"Ask a 20-something about-to-be bride what she thinks of prenuptial agreements and you'll probably hear how unromantic she believes they are. Her betrothed is likely to agree. After all, most first-timers walking down that matrimonial aisle are usually so consumed with love and adoration for one another that they're unable to see much beyond their future plans, hopes and dreams. You can thank love for that.

Ask a 70-year-old blushing bride what she thinks about prenuptial agreements, and she'll tell you they're a necessity. Understanding marriage is as much of a business relationship as anything else, her betrothed will no doubt agree. You can thank love for that, too.

Love, it turns out, is as complicated as a marriage no matter what age or stage in life Cupid's arrow pierces someone's heart. On one hand it's a huge turn-on — a chemically enhanced one at that. On the other, it can take those joined together on a path of twists and turns that is fraught with as much pain as pleasure."

Related articles by Zemanta

• Popping the Question? Ask for a Prenup (youngmoney.com)

Out Of All the Tiger Woods Blather, Here is an Interesting Idea

I avoided discussing or mentioning anything about Tiger Woods' marital problems because I just did not see any thing interesting for me or my readers. That is until I read Lawinfo Weblog's Tiger Woods Mistress Reveals Voluntary 3-Year Affair….. Should There Liability for Intentional Interference With Marriage?

The reports are all over the media of how Tiger Woods apparently carried on an affair with his mistress, Jamiee Grubbs, for almost three years! Some reports (mostly tabloids at this stage) quote Jamiee as stating that Tiger would visit her every few months and they’d “enjoy each other’s company.” Aside from the issue of what can be in a husband’s (or wife’s) mind when cheating… what is the deal with these women who go along with these full-blown affairs with men they know are married?

I’ve written previously about the idea of whether or not you should be able to sue the person who has an affair with your spouse or partner… and your comments are greatly appreciated and insightful. In that post, I intentionally focused on the situation of carrying on an all-out affair with full knowledge that the other person was married. In the business world, one can be held liable for tortiously interfering with a business relationship. For instance, if a person convinces another to break his/her business promises or contracts, or prevents a business person from living up to the same, the meddler can be held liable to the injured party who did not receive the benefits of the business relationship. Should there be a similar legal concept for marital relationships? Isn’t that what these cheating partners do?…. convince a husband to break his marriage promises, interfere with the husband’s marital relationship, preventing the wife from receiving all the benefits of the marriage relationship to which she is otherwise entitled?

***

Interesting arguments on both sides. After reading so many of your comments, it is clear to me that a betrayed spouse certainly is left without a legal remedy…. without a “day in court” …. against a man or woman who intentionally interferes with his or her marriage. Tiger’s wife can only renegotiate her prenuptual agreement… she has no direct remedy against the woman who intentionally, and seriously, caused her injury.

Yes, I call that an interesting idea and with which I have some serious problems. As noted above, this idea comes too close to an alienation of affection suit. Indiana is not going to give alienation of affection a revival. (Well, that is my opinion and I am sticking to it.)

Secondly, having some knowledge of third party interference with contracts, I see both a lot of technical/practical problems:

1. That the third party knew of the marriage contract (does not apply to Woods but if you are going to propose a legal remedy it has to apply generally).
2. The offended spouse will be getting money damages (this being a civil suit), but how will they be calculated?
3. Are the courts or legislatures going to import the justification and/or malice requirements?
4. Since money is the remedy in a civil suit, remember that this money will have to come out of the defendant's assets and/or income. You can get a big judgment but not be able to collect. I call that adding insult to injury.
5. Speaking of judgments, how many plaintiffs will want to put this kind of case to a jury trial? Might take a good look at Family Law Prof's Hope Cheating Spouse's Lover is Rich and especially the comment. I think that comment represents what will be the general reaction of your typical juror.
   

Yes, the idea is interesting but it is not a good idea.

Pre-Nups - Their Limits

But Wisconsin agreements avoid clauses on cheating, pets from The Wisconsin Bar Journal hits on a point that I agree with:

Ballman does not see prenups “that cover things like pets or chores. But I do find that they are getting more specific on matters such as long-term health insurance and health-care decisions for when the parties are older, and contributing to certain funds, etc. People are planning for getting old more than they ever used to.”

One good reason to forgo provisions outlining who will bear the responsibility for trivial matters like taking out the trash — judges don’t want to see them.n puts it in a separate agreement that’s not meant to see the inside of a courtroom.

Yes, there are limits to the patience of judges.  I do not think that I want to argue over a prenuptial agreement's trash removal provisions in front of a judge who has to be thinking that he is dealing with this instead of one of his criminal cases.

I also found this statistic to be true of my practice:

Despite the well-known statistic of 50 percent of marriages ending in divorce, national estimates suggest that just 5 to 10 percent of engaged couples seek prenuptial agreements — although that’s hard to quantify, given that these documents aren’t filed publicly, except for parties litigating their divorces. So wrote Heather Mahar in her 2003 article, “Why Are There So Few Prenuptial Agreements?” published by Harvard’s John M. Olin Center for Law, Economics and Business.

Just Noting Some Blog Posts

Just noting some interesting posts that I wish I had more time to comment on but I think worth reading.

Children & divorce: where do we go from here? By guest bloggers Stephen Hopwood & Andrea Essen. from Marylin Stowe's blog has this:

Well, the unpalatable truth remains that although the Children Act is the best fix for a difficult situation, it will never be as effective as an agreement made by parents who work together for their children. What is more, a recent survey of 4,000 parents and children makes for grim reading. Seventy per cent of parents quizzed cited the child’s welfare as the main priority during separation. However:

• Nineteen per cent of children reported that they felt used, 38 per cent felt isolated and 37 per cent felt alone.
• For 38 per cent of children, the separation meant they never saw their fathers again.
• Many admitted that they had turned to drink and drugs, played truant from school or self harmed.
• Fifty per cent of parents admitted putting their children through an intrusive court process to ascertain access issues and living arrangements.
• Twenty-five per cent of parents surveyed believe that their child was so traumatised by the separation that they self harmed or contemplated suicide.
• Twenty per cent of separated parents admitted that they actively set out to make their partners experience “as unpleasant as possible”, regardless of the effect this had on their children’s feelings.

Woudl that we could have a study like this in Indiana.

Family Law Prof Blog has Georgia Clarifies that Disclosure of Financial Information Is Required for an Enforceable Premarital Agreement.  I cannot imagine any reason for this not to be considered the best practice for Indiana (even if Georgia law itself has no application here).

Also from Family Law Prof Blog are A Divorce Fair? and The Recession's Impact on Child Support.

And I will close with Domestic Diversion's The kids are alright: How children of same-sex couples are doing

When Not to Sign the Prenuptial Agreement

I think Family Law Guy nailed it on when not sign a prenup in his We're saying the same thing; we're just saying it differently

My thought was: "If your fiance hands you a prenuptial agreement at the church door, stop the music, and postpone the wedding! You've just learned something very valuable about your fiance, before you've married him!"

Prenuptial Agreements - Talking About Money Before the Marriage

Take a good look at what the New York Times published in its Your Money column under

- Four Talks About Money to Have Before Marriage. No one wants to think of anything but romance before marriage but money or its lack will tell.  As the fellow sang, it takes money to get along. Think about this and how it is meant to prevent problems in the marriage

What follows is a list of four financial issues that ought to be near the top of the discussion list before getting married. Please add to the list in the comments of the online version of this article.

ANCESTRY When Lisa J. B. Peterson started her Boston-based financial planning firm, Lantern Financial, she knew she wanted to focus her practice on young professionals. She quickly realized that many of them could use premarital financial counseling and built a program called Harmoney around their needs.

One of the first things she asks clients about is what she refers to as their financial ancestry. “It’s looking back at your own personal past,” she says. “How did your parents deal with money, how does that impact how you deal with it, and how might that impact the couple’s relationship?”

Because so many of our money behaviors are learned, she asks couples to share their earliest money memories — whether their father hid money from their mother or how either parent fretted over the funds available. This can be a particularly intense discussion for people whose parents were divorced, and the stories are sometimes accompanied by tears. “Money is so emotional, and people forget that,” Ms. Peterson says. “You think that it’s just numbers.”

CREDIT While it’s about the least romantic subject imaginable, your credit history holds a chunk of your permanent financial record. It follows naturally from the ancestry conversation, and Lantern Financial pulls credit reports and scores for its clients.

Molly Milinazzo and Scott Donovan, an engaged couple who live in the Dorchester section of Boston and are both 24 years old, were relieved to discover that their scores were within about 15 points of one another when they went through the Harmoney program in May. “A lot of people end up surprised, and it’s best to keep those kinds of surprises at bay,” Ms. Milinazzo says.

Full disclosure on the credit front is useful for two reasons. First, a credit report is, in part, a catalog of past mistakes and overall habits — loan payments you missed or department store credit cards you didn’t really need. That in itself is a good starting point for a discussion about what you’ve learned (or still need to learn) about handling money.

There’s an immediate practical side to this, too. If there are errors or low credit scores that a couple can improve, there may still be time to make the fixes so that the couple can get the best rates on a loan for their first home a year or two later.

CONTROL Figuring out who will pay the bills each month may not seem to be an important conversation or assignment. But it gets tricky when both people want to take it on. “People understand that in a relationship, money is control,” says Jeff Kostis, a financial planner in Vernon Hills, Ill., who walks engaged couples and newlyweds through a checklist of questions. “If you’re not paying the bills, you don’t know where the money is going, and you feel like ‘He doesn’t want me to go out with my friends’ or ‘She doesn’t want me to play in the fantasy football pool.’ ”

For two people who have both been on their own for a while and don’t want to give up doing the monthly financial chores their own way, Mr. Kostis suggests, at a minimum, regular household meetings complete with Quicken or other spreadsheets so that the person writing the checks can keep the other one up to speed. With more stubborn couples, he might suggest handing the controls back and forth at the beginning of each year.

Mr. Kuhlman, who explains the counseling approach he and his wife take with clients at stayhitched.com, says it shouldn’t be surprising that control issues come up constantly when talking about money. “It’s concrete, you can see it,” he says. “It’s not ephemeral or less measurable, like affection.”

A few things that he suggests couples discuss early on: If one person is making most or all of the money, does that person get to make most or all of the financial decisions? If you’re the car aficionado or have researched all of the local school options for the children, do you get to make the decisions about those things? “These are the kinds of things that don’t come out when you’re dating,” he says.

AFFLUENCE Here’s another question that tends not to come up during courtship: Just how rich do we want to be one day? Mr. Kuhlman refers to this more politely as the “desired level of affluence.” “Are our career paths going to be something that pulls us together? Or, more often, are they things that will tend to pull us apart, where we’ll really have to be proactive to make sure it’s under control?” he says.

Mr. Kostis might put it a bit more bluntly, say to a spouse of an aspiring investment banker or corporate lawyer: Are you O.K. with acting essentially as a single parent, with your partner working 80 hours a week until the age of 80? “Not that there is a right or wrong answer,” he says. “It’s just about understanding, going into the marriage, what that would really mean.”

Prenuptial Agreements - Estate Planning Idea

Social Jury points out a prenuptial's use in estate planning in Prenuptial Agreements to Protect the Family

With approximately 1/3 of first time marriages ending in divorce, and 50% of subsequent marriages ending in the same fashion, it is becoming increasingly common for one or both parties to already children from a previous marriage. Therefore, a prenuptial agreement is an important way to protect the children who will inevitably become involved in the marriage.

One issue that should be addressed in a prenuptial agreement is: who will inherit the couple’s money if both should die? Another important concern to consider and address in a prenuptial agreement is: how will the biological children of one party be affected if that person should die? In other words, if Bill has two kids and he marries Lorie, what will happen to Bill’s kids if he should die? Will Lorie continue to provide for them? Or, will they be left to fend for themselves? Of course, no parent wants the latter for his children.

A step-parent has no legal obligation to care for children after the death of the spouse. Therefore, a prenuptial agreement can ensure that the children of the biological parent are still cared for after the parent’s death. Issues such as inheritance and life insurance, and who the beneficiaries are of both, should be included within the prenuptial agreement. Therefore, a person with children who is getting married should consider a prenuptial agreement in order to secure a strong future for the children.

Children are not the only people who can be affected by a divorce. Other family members and business partners can be, as well. If Beth owns a family business, which has been passed down for generations in her family, she can protect the family business with a prenuptial agreement. Since a prenuptial agreement has to be fair to all parties, Beth will most likely need to “give” something in return in the prenuptial agreement. The peace of mind knowing that the family business will remain in tact, and stay within the family, is well worth the trade off.

In a similar fashion, business partners can be protected with a prenuptial agreement. If Tom and Scott have worked over the past five years to create a successful business, and Tom is about to get married, the business and its assets can be protected by the prenuptial agreement. This not only protects Tom, but it protects Scott, as well. Without a prenuptial agreement, Tom and Scott’s business could potentially be torn apart by a divorce.

A prenuptial agreement can also help protect the parents of one of the partners who are about to get married. For example, if Cindy has parents who are ill and need to be cared for, Cindy could have it included in her prenuptial agreement that her parents can live with the married couple to be cared for. Similarly, she could have it included in the prenuptial agreement that the couple agrees to pay for care for Cindy’s parents in a residential nursing facility.

Prenuptial Agreement Humor - Cajun Style

Just because we all need a bit of humor, the serious stuff can be found clicking on the label below.

Boudreaux & Thibodaux - Cajun Prenup

Prenuptial Agreements - Some Less Traditional Ideas

I think Smith Family Law Center has some interesting ideas its article, Prenuptial Agreements

But this just scratches the surface of what is available for inclusion in prenuptial agreements. Less traditional uses of a prenuptial agreement include:

* establishing how a family business will be formed, capitalized and run during the marriage, and then laying rules for the continuation or dissolution of the business upon the termination of the marriage;
* setting forth the goals that the family will work together toward achieving and the values that they will maintain in good times and bad;
* determining in advance and at a time of no rancor how the family will raise their future children (religious upbringing, forms of discipline, etc.)
* establishing how and under what circumstances the spouses will jointly own and manage property and investments.

The items that can be included in a prenuptial agreement are generally limited only by the imagination of the parties and the skill of the drafter.

Reading over all this, I am struck how some of this seems to verge more into the territory of a marriage contract.  Others leave me wondering how a court will enforce these provisions - but then that will depend on the actual writing (drafting) of the agreement.

Your Legal Corner: Prenuptial agreements has a more restrained approach:

The contents of a premarital agreement may include: disposition of property that is held separately, jointly, upon death, separation, marital dissolution or when a certain stated event occurs. You may also include if a will, a trust or other agreed arrangement should be made in an effort to carry out the terms of the prenuptial agreement. 

As long as it does not violate public policy, it may be written into your prenuptial agreement. Because prenuptial agreements are situation specific, a Family attorney will be able to guide your detailed questions or concerns.

Finally, Smith Family Law Center has what amounts to the best argument for a prenup:

The fact that no consideration except the marriage itself is necessary to formalize a prenuptial agreement makes it attractive to the financial secure, and the fact that it is extremely flexible and forward-looking makes the prenuptial agreement attractive to the rest of us. In the past, when divorce was rare, prenuptial agreements were seen as only appropriate for the super wealthy. Now they can be seen as prudent for nearly everyone

Remember, if you want more information about retaining me for a case, please give me a call at 765-641-7906.

What Happens to My Business if I get Divorced?

That is the question posed by Divorce Articles and Advice in the blog post, Does divorce mean my ex can get a hold of half my business?.

I think the English answer is not so different from the Indiana answer:

REALITY: It is very rare indeed for a business to be sold just because of a divorce and the relevance of business is often that it produces the income to provide for any children. If the business can afford a lump sum and your ex-wife needs the financial support, you may have to take out funds for that purpose. Normally though, the main relevance of a business, apart from producing the income, is that its rough value goes into the pot when calculating the overall assets.

Here, the spouse's interest in the business would be generally part of the marital pot, but then things can get complicated. Let me list the complications:

1. Whether the business is solely owned by the spouse or if there are co-owners.
2. Whether the business is a Limited Liability Company and what are the terms of the operating agreement.
3. Whether the business is a corporation and what are the terms of the corporation's by-laws.
4. How to value the business.
5. Was there a prenuptial or post-nuptial agreement?

And these are only the obvious complications.

Suggestion for any business owner facing even the possibility of divorce - get yourself to a lawyer.

Why I am offering unbundled legal services

I decided to offer unbundled services because I run across things like How To Write A Prenuptial Agreement Without Using A Lawer?

Me and my fiance would like to write a prenuptial agreement before marriage. We don’t want to use a lawyer because we only have a very few things to agree upon and we are very clear about all of them.
What is the easiest way to write the prenuptial agreement? Is there any template available online so that we can just put our agreements in? What should we pay attention to ?

What do I see here?  I see two people:

1. Who want a prenuptial agreement.
2. Who will use an online form.
3. Who do not understand what they are doing with the form.
4. Who will rely on non-professional help rather than seek out a lawyer.
5. Who for some reason think that it is only content of the agreement and ignore the procedure of a prenuptial agreement.
6. Who stand a very good job of botching the job.

By unbundling services, I hope to accomplish the following:

1.  Keep the people from botching the job
2. By giving them the opportunity to have a lawyer review their work
3. At a cost reasonable to both sides of the transaction,

Using the above example, the clients would bring (or send) in their proposed prenuptial agreement and I would act as editor.  Suggesting changes or pointing out outright problems with the form under Indiana law.  

Debts and Marriage- Think You Are Liable for a Spouse's Debts?

I have no idea why people think that marriage automatically creates liability for the other spouse's debts.  I really like the article Is a Prenup Right for Me? until I reached this:

Third, if your fiance has a large amount of debt, you would not want to become legally liable for it. While this may sound cruel, we feel that we all need to accept responsibility for our choices in life.

I cannot imagine a premarital debt that creates liability post-marriage without a voluntary act by the other party.   But people still think the act of marriage by itself creates liability for debt.

There are plenty of reasons for the a prenuptial agreement (and the article has them) but this is not one of them.

Dying After Filing Divorce But Before Final Hearing

The Post-Tribune's Next steps in probate estates picks up a few scenarios where estate planning and family law intersect:

Your "probate estate" is all property that you own along with interests in property that do not pass to others by what is known as "operation of law." Examples of property that will not be included in your probate estate are 1) bank accounts you may own with a relative that are jointly held with a right of survivorship; 2) a house you may own with your spouse that is titled jointly with right of survivorship -- meaning that if you die, your spouse will receive the total ownership at the instant of your death -- and vice versa. In this event, the house would not be part of your probate estate. However, if you are divorced, this contingency is unlikely. If you don't have a will, then your assets will be distributed according to state law

Yes, you forget to change the former spouse as the beneficiary on bank accounts, 401(k)accounts, vehicles, insurance policies, or land, and that property goes to the former spouse. And nothing can be done about it by the other heirs.

Which is why family law attorneys want you to double check your estate planning documents after the divorce. Since we are worrying here over the subject of death before a divorce, make sure you discuss these property issues at your first meeting with a lawyer.

The article goes onto to discuss Wills and intestacy statutes and what will happen if you or your spouse die before the judge signs the Decree of Dissolution:

If you separated, but not divorced, you can't cut your spouse out of your will -- unless there is a written waiver or release in your separation agreement or prenuptial agreement. In most states, a surviving spouse -- even if estranged -- is granted the right to elect against the will and take a statutory share if the will leaves him or her nothing. Generally, this share is one-third. Some states also have an allowance for the surviving children. If you try to cut your spouse out of your estate through your will, he or she can renounce the will and, instead, make an election to take the share of your estate provided for by state law. Remember: The share and definition of what is included in your estate varies from state to state.

If you die without a will, are still married but separated and have children, most state laws require that a third to a half of the estate will go to the surviving spouse and the rest to the children, no matter their ages. If the children are minors, in all probability, the probate court will require their share be maintained in a guardianship account with reports and accountings made to the probate court until the child reaches 18 (21 in some states).

Of course, a prenuptial agreement would smooth out these problems. But are you going to get one?

And, yes, we did have a case few years ago that went up to the Indiana Court of Appeals -one spouse dies before Final Hearing and what was to be former spouse became an heir instead and inherited what was to be lost in the divorce.

Prenuptial Agreements for the Family

Here is an unpleasant problem: parent's estate planning consists solely of trusting to step-parent to care for parent's children but the step-parent ignores the parent's children after the parent's death. Hard to tell the children that parent screwed up and (usually) nothing can be done- there is such a welling of emotions ranging from incredulity to anger to resentment.


The Golden Scribe's Prenuptial Agreements to Protect the Family does a good job of explaining the problem and its solution:

"One issue that should be addressed in a prenuptial agreement is: who will inherit the couple’s money if both should die? Another important concern to consider and address in a prenuptial agreement is: how will the biological children of one party be affected if that person should die? In other words, if Bill has two kids and he marries Lorie, what will happen to Bill’s kids if he should die? Will Lorie continue to provide for them? Or, will they be left to fend for themselves? Of course, no parent wants the latter for his children.

A step-parent has no legal obligation to care for children after the death of the spouse. Therefore, a prenuptial agreement can ensure that the children of the biological parent are still cared for after the parent’s death. Issues such as inheritance and life insurance, and who the beneficiaries are of both, should be included within the prenuptial agreement. Therefore, a person with children who is getting married should consider a prenuptial agreement in order to secure a strong future for the children."

Now, if we could just get people to listen and act to prevent unpleasant surprises to their children.