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The Collaborative Premarital Agreement Process – A Better Way to Start a Marriage

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As more and more couples are waiting longer to marry, California lawyers are seeing an increase in requests for Premarital (also called Prenuptial) Agreements. By the time they get married, many people already have assets, such as retirement accounts and real property, and some even have children from a prior relationship. During the COVID19 pandemic, many people experienced the downsides of not having a premarital agreement and/or updated estate plan; with the loss of remarried loved ones, they also lost their family legacy to a stepparent or step grandparent. In one case, mom passed away quickly and, having no “prenup” or estate plan, stepdad, by default, got mom’s premarital assets. Result? Her two adult sons (who did not get along with stepdad) were given a couple of jet skis and were told to go away. Stepdad kept the family home, mom’s car, bank accounts, and personal belongings. You never think it will happen to you, until it does.

Despite its negative reputation, prenups can be an opportunity to plan for a successful marriage, to have a voice in the management of separate property assets during the marriage and to create a joint plan for separate and community property assets in the event either spouse predeceases the other as well as in the event of separation or divorce.

The word “prenup” can be a trigger given the “traditional” process: two lawyers, each in private session with their client, the first drafting a proposed agreement that strongly favors her client (who likely has more money and assets than the other party), the second receiving the draft agreement, explaining to his client how grossly unfair it is to her, and editing the agreement in favor of his client. This continues back and forth until the attorneys confirm that their clients have approved a final draft. The experience can be so negative, that the relationship is harmed rather than strengthened.

This process feels adversarial for a couple of reasons. First, the negotiations start from a competitive position, in favor of the initiating party. The receiving party then mirrors that behavior, given how outrageously unfair the first draft was. And they continue until they find a middle ground. While less extreme than the initial draft, there often remain provisions that leave one party feeling insulted or hurt.

Second, direct communication between the couple rarely happens and is typically not productive. Given how uncomfortable many couples are in talking about things like money, they will avoid direct discussions and only speak on such topics through their lawyers. Not only does this set a poor model for communication and problem-solving during the marriage, it’s also a time-consuming and expensive way to create the agreement itself.

Enter the Collaborative Premarital Agreement Process, which looks something like this:

Premarital Agreement Process

Sam calls lawyer Diana for a prenup. Diana tells Sam it’s important for fiancée Jo to have a lawyer as well, and that Jo may want to look into finding a collaborative lawyer. Diana sends Sam some information on the collaborative process, and they schedule their first meeting. If Jo hasn’t yet retained a lawyer, Jo is invited to that meeting. The first meeting is limited to discussing the process options – the actual negotiation of the agreement will take place only when Jo has retained a lawyer. If Jo already has a lawyer, both lawyers will meet to create the process for collaborative discussions.

Diana (and Jo’s collaborative lawyer if already retained) will jointly explain the collaborative process to co-create the Premarital agreement, which includes:

  • Jo and Sam meeting with both collaborative lawyers individually and in 4-way meetings. Often, a neutral family specialist (a therapist) and/or a neutral financial professional is/are brought in as well. This is a client-driven process, with the collaborative professionals helping the couple co-create an agreement that meets their individual and shared interests and goals.
  • Sam and Jo exchanging full financial disclosures with each other. Full financial disclosure is required for all premarital agreements to ensure that both parties are making informed decisions. This is key to an enforceable agreement.
  • The collaborative professionals guiding the couple through productive and respectful discussions, making sure that neither feels pressured. Another key piece that judges look for when enforcing prenups is the validity of the agreement which depends, in large part, on the voluntary and informed participation of each party. That means that neither was coerced, under duress, or mis-informed; that both had the time, space, and information to calmly review and understand each part of the agreement.
  • The collaborative professionals facilitating the discussions to help the couple build the financial foundation of their marriage. The focus is the relationship and future health of their family.
  • The couple speaking individually and confidentially with their individual collaborative lawyers AND with each other directly, with the support of their collaborative professionals.
  • The collaborative lawyers jointly drafting the Premarital Agreement for the couple to review. There may additional revisions as well as meetings to go over the agreement as needed, and then the signing ceremony with everyone present (or not – it’s really up to the couple).

How is this a better way to start a marriage?

  1. Collaboration. Working together creates an environment where everyone supports shared goals and understanding. There is no unknown lawyer promoting an extreme position.
  2. Direct Communication. Productive direct communication results in stronger and more complete solutions and reduces legal fees by eliminating the time it takes for party A to communicate to his attorney who then communicates to party B’s attorney who then communicates to party B and reverse for the response.
  3. Interest-Based Discussions. Where the traditional approach is position-driven (my house stays my house no matter what), the collaborative approach focuses on interests. For example, I want us to share my house during our marriage and preserve it as a legacy for my children. The couple in the collaborative model are encouraged to discuss both non-financial interests as well as their financial interests. The resulting agreements are more likely to satisfy the interests of both and create a foundation for a long and happy marriage.

There is no one-size-fits-all when it comes to creating your premarital agreement. The collaborative process strives to create a more productive and inclusive model than the traditional adversarial process of one-sided bargaining. The collaborative process can be tailored to the needs of the specific couple and can be started individually with the family specialist and/or each person’s collaborative lawyer to work through hidden interest and how best to present them. This process also sets the framework for working through difficult discussions moving forward, thereby setting a foundation for a successful marriage.

How Does a Legal Separation Differ from a Dissolution of Marriage?

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If you are unhappy in your marriage what can you do about it? You could seek a divorce, a legal separation, or a nullity. The process of filing a case with the court is almost identical, but the procedure and the ramifications of filing a legal separation or a nullity instead of a divorce are different.

In California since 1970, we have a “no-fault” system in which there are only two grounds for divorce — “irreconcilable differences” and “incurable insanity.” Irreconcilable differences can encompass a wide variety of reasons, but often means that the spouse applying for the divorce is in a new or better relationship, is being harassed or abused by the other spouse, or wants a different life in another state or country but their spouse does not want to move away. Any of these reasons can create a breakdown of the marital relationship, with required testimony to the court by the petitioning spouse, that the couple can no longer live together.

Why file for a legal separation instead of a divorce? The court forms and the court process of filing for either a divorce or a legal separation are almost identical. In every legal separation or divorce process there are three areas in which choices by the spouses must be made. If any child is under the age of 18, a parenting agreement must be drafted as well as the allocation of child support determined, especially for a child with special needs. Also, spousal support could be an issue if the earnings of each spouse are substantially different. Finally, the personal or real property owned by Husband and/or Wife which is community property must be divided.

However, if you select the legal separation route, you do not terminate the marital relationship. What are the reasons for doing this? They might include the following:

  1. Either husband or wife feels compelled by religious beliefs to remain married even if husband and wife are no longer living together.
  2. A Judgment of Legal Separation enables one of the spouses who may not qualify for health insurance because of a pre-existing condition, or cannot afford to obtain their own health insurance policy, to remain on the health insurance of the other spouse for as long as they are still married.
  3. The Judgment of Legal Separation can divide marital property, provide spousal and/or child support for a minor child or children, divide marital debts, terminate the responsibility of each party to pay for the new debts or expenses of the other party after date of separation, and terminates the liability of one spouse for the other without fulfilling the requirement that at least the Petitioner resides for at least 3 months in the county of the Court’s location and for at least 6 months in the State of California. (However, to terminate the marital status of husband and wife, a divorce/dissolution of marriage must be filed by at least one of the parties who has resided for at least 3 months in the county of the Court’s location and at least 6 months in the State of California.)

Because legal separation or divorce in California is complicated, it is best to seek consultation and/or representation from licensed, experienced, and skilled family law attorneys as well as other licensed mental health and financial collaborative practice professionals.

12 Reasons To Create Your Premarital Agreement Using the Collaborative Process

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by Leslee J. Newman, CFL-S, Family Law Attorney
Orange, California

  • Each premarital partner selects their own Collaborative attorney to represent him or her from the very beginning of the premarital Collaborative Process. You and your Collaborative attorney work together until the premarital agreement is completed and signed.
  • Neutral professionals such as a financial planner and/or a Collaborative coach may also be added to your Collaborative team to help you and your partner develop and fully understand your goals as a couple, and the legal and financial ramifications of your decisions.
  • Before any drafting takes place, you and your partner are encouraged to express your thoughts and concerns about what you plan to build together as joint property and what you want to maintain as separate property.
  • Full disclosure of the property and debts of each premarital partner is exchanged including some verification of each asset and each debt.
  • After full discussion, disclosure, and agreement is reached by the premarital couple, the agreement is drafted through the participation of both Collaborative attorneys.
  • After the draft of the premarital agreement is completed, the draft is fully discussed and explained to each premarital partner by his or her Collaborative attorney.
  • Additional drafts and revisions are encouraged by the Collaborative team until both members of the premarital couple are fully educated and satisfied with your agreement.
  • The Collaborative Process takes most of the stress out of the creation of a premarital agreement at a time when you are undergoing the tension and burden of planning your wedding.
  • With the premarital agreement completed, you can concentrate on your wedding plans, the joy of your wedding day, and your honeymoon.
  • After you are married, if there are any changes you wish to make to your property or financial planning, you can return to any of the members of your Collaborative team for assistance.
  • If you should divorce, your premarital agreement should be enforceable by California law because of the guidance of your Collaborative professionals, and the multiple opportunities you each had to discuss, question, and revise your agreement.
  • In the event a divorce occus, the Agreement should serve as a roadmap to simplify your divorce, make it move along more quickly and in most cases make it less expensive. Additionally, you may stay in the Collaborative Process for your divorce agreement, with some or all of the original Collaborative professionals assisting you who already know you and your spouse.

Teamwork is the Key to Success in Collaborative Divorce

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by Dr. Carol Hughes, Ph.D., LMFT

Clients often wonder how working with a team of professionals will benefit them when moving forward with the Collaborative Process for their divorce. Even experienced practitioners sometimes fail to understand how all professionals on an interdisciplinary team can assist and support clients, even high-conflict clients, to become “Agreement Ready.”

Licensed Marriage and Family Therapist Dr. Carol Hughes, family law lawyer Diana L. Martinez, and financial specialist Cathleen Collinsworth offer recent findings from neuroscience showing how working in teams can assist clients resolve even their most difficult conflicts at the upcoming Collaborative Practice California (CP Cal) “Celebration XI” Conference in Redwood City, California April 29 – May 1.

Dr. Hughes says the training is designed for all practitioners who want to continue evolving their ability to assist clients with the powerful tools provided through the Collaborative Process. Participants will learn techniques for assisting clients:

  • Identify and develop the clients’ ‘Key Elements of Agreement’ that avoid being too specific or too vague and therefore of no value.
  • Identify and develop the clients’ ‘Questions To Be Answered’ relative to their ‘Key Elements of Agreement.’
  • Develop ‘Options for Resolution’ that are both individually and family-centric interest based.
  • Evaluate their ‘Options for Resolution’ and co-create their Agreements.
  • Develop the necessary skills to support their interdisciplinary professional team members in the Agreement Readiness process.

From the inception of a case, interdisciplinary teams of lawyers, neutral financial specialists, divorce coaches and neutral child specialists can employ tools and techniques to shift clients toward Agreement Readiness. By doing so, a team can save client costs and facilitate better outcomes through more durable divorce agreements for the entire family involved.

Presenters (left to right) Dr. Carol Hughes, Cathleen Collinsworth, and Diana L. Martinez of Collaborative Divorce Solutions of Orange County.
Presenters (left to right) Dr. Carol Hughes, Cathleen Collinsworth, and Diana L. Martinez of Collaborative Divorce Solutions of Orange County.

“Our goal in the end is to educate our prospective clients that the goal of the Collaborative Process is reaching a final agreement each party can ‘live with,’ one that provides clarity and substantive closure for each of them,” said Dr. Hughes. “The agreement must also reflect their values and goals, no one else’s including the professional team’s goals.”

Dr. Hughes said it is important for each Collaborative team member to develop the necessary skills to support their clients. But what is often forgotten is the importance of learning how to develop similar skills to provide support among the professional team members as they work together to move the Collaborative Divorce case through the Agreement Readiness process.

“Just as it is critically important for the team members to work together to support their clients, we need to work together to support each other and allow the unique value that each professional from the three disciplines brings to their Collaborative Divorce team to flourish,” said Dr. Hughes. “This helps us educate clients about the pivotal role of each member in facilitating cost effective outcomes and durable agreements.”