Tag Archive for: prenuptial agreements

How a prenuptial agreement can protect your business

Milwaukee residents who own businesses may have a little hesitancy about getting married. These business owners love their soon-to-be-spouses, of course, but they do not want to risk the health of the businesses they have worked so hard to establish in the event that they are to divorce.

One good way that some business owners choose to ensure the ongoing integrity of their businesses is to seek out a prenuptial agreement before marrying. One family law expert called prenuptial agreements “the most cost-efficient and reliable pre-marital contract that can protect your business in the event of a divorce.”

The primary reason this and other family law insiders hold this opinion is that a prenuptial agreement specifies how property will be distributed in the event of a divorce. In the context of a business, that means you can state in advance that you will maintain ownership of your business and its assets if you and your spouse eventually split.

Of course, this presumes two things: that your prenuptial agreement is valid and enforceable and that it has been specifically customized to you and your unique situation. For this, you will need to identify and work with a family law attorney whom you trust and esteem. Lawyers who specialize in this field are familiar with the ins and outs of this area of law and can make sure that you are getting a prenuptial agreement that works for you.

A good way to find an attorney with whom you would like to work is to ask family members, friends and business associates if they have any recommendations. You can also check with your local bar association.

Source: Forbes, “Protecting Your Business In A Divorce: Pre-Nuptial Agreement,” Evangeline Gomez, Nov. 2, 2011

Reasons why a prenuptial agreement may not be enforced

Divorce attorneys in Wisconsin and around the nation are taking note of a recent court case in which the judge threw out a prenuptial agreement that a woman had signed prior to marrying her multimillionaire husband. Previously regarded as difficult to void, prenuptial agreements have become increasingly common, especially for people with high net worth or those entering second marriages. How enforceable are they in light of the recent court case?

A prenuptial agreement is a legal document signed prior to marriage documenting the future spouses’ understanding regarding which of their assets will become marital property and how property division will be handled in the event of divorce. There are several circumstances under which a court may refuse to enforce a prenuptial agreement. If one party undervalued or failed to disclose assets at the time the prenuptial agreement was signed, the court may refuse to enforce it on the grounds of fraud. Accordingly, full disclosure of all assets and liabilities is important to the future enforceability of the agreement.

A prenuptial agreement also is subject to revocation if it was coerced or executed under duress. The agreement should be negotiated and finalized well in advance of the wedding, not presented for the first time shortly before the bride is to walk down the aisle. It should be signed by both parties in the presence of a notary public or other witnesses who can confirm that it was executed voluntarily and without coercion.

Poorly drafted agreements and those containing a number of errors also are susceptible to being thrown out. Agreements that contain unconscionable provisions, such as a stipulation that no child support will be owed under any circumstance, also are subject to challenge. The best way to ensure the effectiveness of a prenuptial agreement is for both parties to have their own legal representation in the negotiation and drafting of the agreement.

Source: Forbes, “Five Reasons Your Prenup Might Be Invalid,” Jeff Landers, April 2, 2013

The ins and outs of prenuptial agreements

Some married couples in Wisconsin may not have prenuptial agreements. Given that nearly half of all marriages end in divorce, however, someone who is about to enter into matrimony may wish to consider getting one. Indeed, prenuptial agreements are becoming increasingly common, especially for people who are entering second marriages and for those who are getting married later in life.

A prenuptial agreement is a legal contract signed before marriage that sets out the future spouses’ understanding regarding which assets will become part of the marital estate and how property division will be handled in the event the couple later splits. When drafting a prenuptial agreement, one should keep in mind that full disclosure of all assets and liabilities is crucial to the agreement’s future enforceability. If one party to the agreement failed to disclose all of his or her assets or debts at the time the agreement was signed, a court later may refuse to enforce the agreement on the basis of fraud.

When drafting a prenuptial agreement, the parties may consider including a sunset clause. Such a clause provides that the agreement becomes void and no longer enforceable after a certain period of time or the occurrence of an event such as the birth of a child.

It is important for each party to a prenuptial agreement to have their own lawyer to negotiate on their behalf and to represent their separate interests. If a prenuptial agreement contains lopsided provisions that unfairly advantage one party over the other, it is vulnerable to subsequent challenge. A lawyer also can help ensure that the agreement meets the court’s standards. For example, celebrity couple Steven Spielberg and Amy Irving had a prenuptial agreement that was drafted on a napkin. When they divorced in 1989, the court ruled the agreement was invalid and awarded Irving $100 million. Had Spielberg consulted with an experienced family law attorney about the agreement, he may have obtained a better result.

Source: Huffington Post, “Prenup Tips: ‘Fox And Friends’ Tackles Prenuptial Agreements“, July 18, 2013

Prenups becoming more popular

According to U.S. census data, as many as 50 percent of marriages end in divorce. An increasing number of couples in Wisconsin and across the country are turning to prenuptial agreements as a way to resolve issues ahead of time should their marriages end in a divorce.

The American Academy of Matrimonial Lawyers reports that more than 60 percent of divorce attorneys who responded said that they have seen an increase in prenuptial agreements during the last three years. Additionally, 46 percent of these attorneys said that they have seen a significant increase in women requesting these types of agreements. Historically, men were more likely to be the ones requesting these agreements as they tended to have more assets to protect. However, as an increasing number of women enter the workforce they have more property than before. Additionally, people are likely to be more aware of the financial complications of death and divorce, making them more likely to enter into these agreements.

The three primary reasons that individuals enter into prenuptial agreements are the protection of separate property, spousal maintenance and property division. Many advisers recommend talking about a prenuptial agreement early in the relationship rather than bringing up the idea right before the wedding. It is suggested that couples discuss whether they will maintain joint or separate bank accounts, how expenses will be divided and paid for and who will stay in the marital home in the event of a divorce.

Couples going through a divorce often have disputes about the valuation or ownership of assets that may hinder reaching a property division settlement. A prenuptial agreement may be a possible way to help resolve this type of issue in advance.

Source: Pittsburgh Post-Gazette, “More couples saying ‘I do’ to prenups“, Time Grant, October 31, 2013

Determining who gets the home in a divorce case

Couples in Wisconsin who have made the decision to divorce may find that a variety of other choices now must be made. Those ending their marriage must figure out asset division of everything from household furnishings to the family home itself. As a community property state, Wisconsin courts attempt to divide property acquired during the marriage as equally as possible in most divorce cases, leaving both parties with a comparable share of assets and liabilities.

Lawyers acknowledge that the couple’s home may be one of the more difficult assets to divide, simply due to the high value of a home. Dividing a home equally typically means that the home will need to be sold, with each spouse getting half of the equity. If the home is being lived in during the divorce, the expenses that occur, including monthly bills and maintenance or repairs performed, will usually be split equally as well.

If one individual wishes to keep the house, courts will determine if it is a viable choice by evaluating the budget of the spouse to ensure that they can afford the home and by making sure that the other spouse receives an equal amount of marital assets. Getting an appraisal of the home may be an ideal choice so that both parties agree about the value of the home.

Divorcing couples may be able to agree on property division during a divorce. If couples do not, their attorneys may be able to negotiate an arrangement regarding marital property in order to avoid a trial. Prenuptial agreements are also taken into account when dividing property in Wisconsin.

Source: The Huffington Post, “What to Do With Your House in a Divorce Case “, Christian Denmon, Denmon & Denmon Trial Attorneys, December 09, 2013

Prenuptial Agreements Rising in Popularity

In a recent study by the American Academy of Matrimonial Lawyers (AAML), 73 percent of attorneys reported an increase in prenuptial agreements over the past 5 years. Of those surveyed, 52 percent also reported an increase in women requesting the agreements.

Prenuptial agreements, sometimes referred to as antenuptial agreements or as “prenups”, are pre-marriage contracts that specify how property would be divided in the event that the couple divorce. Some may think that these agreements are only for the rich and famous. However, the major increase in prenuptial agreements is coming from everyday people.

One major source of the increase in prenuptial agreements comes from couples entering a second marriage. Many people who have been through a contested divorce want to limit the possibilities of going through a second contested divorce. Having a prenuptial agreement is a good way to avoid extensive property fights in another contested divorce.

However, prenups are not just people entering a second marriage. Over the past 30 years, we have seen a trend towards people marrying later in life. Since 1980, the average age for a man getting married for the first time has gone up two years and is now at 26.8 years of age. For women, the average age has gone up nearly 3 years, and is now at 25.1 years of age.

Many people are no longer getting married right after school and are working for a few years before marriage. This gives people more opportunity to work and therefore people are bringing more assets to a marriage. We are seeing that prenuptial agreements are not just for the very wealthy; rather prenups are for any person who wants to protect the assets he or she brings to a marriage in the event of a divorce.

Source: Minneapolis Star Tribune: More couples saying ‘I do’ to prenups; Jeff Strickler, 10/27/2010

Millions More Demanded in Kelsey Grammer Divorce

Kelsey Grammer, the actor best known for his portrayal of Dr. Frasier Crane, has had a tremendously successful career in television. He played the role of Frasier Crane for 20 years, 11 of which were on the NBC sitcom “Frasier.” At the peak of his earning power on “Frasier,” Grammer earned $700,000 per episode. “Frasier” ran from 1993 to 2004 and Grammer married his third wife, Camille Donatacci in 1997.

Many people credit Donatacci with helping Grammer turn his acting earnings into an even larger fortune through strategic investments in real estate and establishing Grammnet, a television production company, which has produced several television shows including NBC’s “Medium.” It is estimated that Grammer’s net worth has expanded to between $100 and $120 million.

Grammer and Donatacci married in 1997 and have two children together. However, due to reports of an extra-marital affair, Donatacci filed for divorce from Grammer in July 2010. The couple did not sign a prenuptial agreement, which may prove very costly for Grammer.

Grammer is interested in settling this divorce quickly because he wishes to remarry as soon as he can. However, the issue of marital property division is proving to be an obstacle to settlement. Grammer had offered a settlement of $30 million.

Just before Christmas, Ms. Donatacci rejected that settlement offer because she believes community property law entitles her to $50 million of the estimated $100 million he earned during their 13-year marriage and that she is entitled to her fair share as a cofounder of Grammnet Productions. Additionally, Donatacci is requesting child support and spousal maintenance, which Grammer’s offer reportedly did not include.

Sources:

Huffington Post, “Camille Grammer Demands $50 Million In Divorce Settlement: Report,” 12/30/2010

The Telegraph, “Kelsey Grammer facing large divorce pay out,” Nick Allen, 12/29/2010

Prenuptial agreements can protect property in Wisconsin

When people divorce in Wisconsin, their property is divided between them according to Wisconsin’s community property law. Wisconsin’s community property law starts off with the presumption that all property and debts of the spouses that were acquired during the marriage are equally owned and therefore will be equally divided in the event of a divorce.

This poses unique problems for people who own a business. In many situations, a spouse of a business owner will be entitled to a share of the business. This can be so even if the business was established well before the marriage. With that in mind, many people would like to do what they can to protect their business interests in the event of a divorce.

Many people use a prenuptial agreement to protect their businesses in the event of a divorce. However, prenuptial agreements are very complex documents and should only be made with the advice of an experienced family law attorney.

Generally, a prenuptial agreement is a contract between two spouses that specifies what the spouses’ property rights would be in the event of a divorce. The contract must be signed by both spouses before the wedding. In order to be binding, a prenuptial agreement must meet several legal requirements.

Prenuptial agreements must be in writing. Verbal prenuptial agreements are generally not enforceable. The agreements must also be the product of both spouses acting freely and there can be no coercion or force involved. These agreements should also provide for a full disclosure of assets and the signing of the prenuptial agreement should be witnessed.

Importantly, prenuptial agreements need to be fair. These requirements may seem straightforward, however many couples inadvertently create a prenuptial agreement that fails to meet these legal requirements. In order to make sure you have a prenuptial agreement that is airtight, it is important to work with an attorney who is both knowledgeable and experienced in Wisconsin family law.

Source: Forbes.com, “Divorce-Proof Your Business, Even If You’re Still Single Or Happily Married!,” Jeff Landers, 4/19/2011

Keeping your small business intact when your marriage dissolves

When Milwaukee couples come to a mutual decision to divorce, they might also expect to be able to reach negotiations regarding child custody and property settlements with little interference from a third party. However, when complex issues and high assets are at the center of discussion, negotiations often become very complicated.

One small business owner discovered how complex the divorce process can be after he failed to take precautionary measures before marriage to protect his firm in the event of a divorce. As a result, it took more than a year before the man and his ex-wife were able to reach a divorce settlement, and the process nearly destroyed his business.

The business owner commented that his divorce was “painful” and “costly” for many reasons. In states such as Wisconsin, a small business may be considered marital property. If this is the case, business owners risk dissolving the business by splitting the interest with a spouse, or one spouse could buy the other out. The business owner commented that so much time was spent on retaining his business in the divorce that he lost focus on his consulting firm.

In fact, he believes that his consulting firm lost more than $200,000 in potential business. Fortunately, the man was able to retain his business in the divorce and he eventually turned the company around. However, many attorneys who deal with high asset divorce cases commented that without taking certain measures to protect one’s business in the event of a failed marriage, individuals could see their businesses go under as well.

In order to prevent one from losing his or her small business because of divorce, individuals have several legal options that they can explore. Before marriage, business owners may want to consider preparing a prenuptial agreement to detail what should be considered marital assets or what each spouse agrees to be entitled to if they ever divorce.

Another option is to prepare a buy/sell agreement which helps owners create a plan regarding what should happen to their business and how ownership should be determined in the event of certain triggering circumstances such as a divorce.

Although Milwaukee couples may understand that their marriages cannot be saved, they can take precautionary measures to ensure that they don’t risk losing their business as well.

Source: Reuters, “Divorce has “immense” impact on small businesses,” Deborah L. Cohen, Sept. 28, 2011

Tony Parker Files for his own Divorce from Eva Longoria

Actress Eva Longoria and San Antonio point guard Tony Parker had what was characterized as a fairy tale wedding in a French castle in 2007. Unfortunately, their marriage was not to last. Earlier this month, Eva Longoria filed for divorce from Tony Parker. Shortly thereafter, Tony Parker filed for a divorce of his own.

Although they were married, the couple spent much of their time apart. Most of the time, Eva lived in Los Angeles and Tony lived in Texas. Amidst rumors of illicit text messages and a possible affair, Eva decided to file for divorce in California. Although Parker and Longoria had a prenuptial agreement that precluded alimony, she reserved the right to seek alimony in her divorce filing. Alimony can be a scary word, and that may have been what caused Tony Parker to file for divorce in Texas a few days later.

Alimony goes by several names. We call it maintenance in Wisconsin. In Texas, it is referred to as maintenance as well. Alimony or maintenance obliges a spouse to continue to pay for the other spouse’s living expenses after divorce. Although we have a different name for the concept than California, alimony in Wisconsin and California works much the same way. Whether to award maintenance is largely a matter of judicial discretion. Family law judges consider a variety of factors including the length of the marriage, the income and earning power of both spouses and the health of the spouses.

Even though Texas and Wisconsin both call it maintenance, Texas maintenance law works differently in significant ways. In Texas, family law judges have less discretion to award maintenance. In fact, Texas only allows maintenance in a few specific situations including that the spouses need to be married for at least 10 years. Since Eva Longoria and Tony Parker were only married for three years, Eva Longoria would not be eligible for maintenance in a Texas divorce.

Source: Los Angeles Times: Tony Parker files for divorce from Eva Longoria, Texas-style; Christie D’Zurilla, 11/22/2010