Did you hire an attorney to draw up a premarital agreement to protect your assets?
There are instances in which a court can overturn a prenuptial agreement. So be sure to read my suggestions at the end of this article.
There have been cases when an ex-spouse will claim the agreement should be invalidated because he or she signed it under duress.
Take the case of Rasheed Wallace, the former Piston and New York Knicks basketball player, whose combined assets and investments are estimated at $75 million.
That's a lot of money, right?
The Story of Rasheed and Fatima Wallace
Here's the story. Rasheed and his wife Fatima married when he was playing with the Portland Trail Blazers. Since then, he has played for other teams as well.
Eventually, he was traded to the Detroit Pistons and then worked with the team as an assistant coach until last year. Fatima moved there when he was still a player and remains there with the couple's two children - now 10 and 17 - in a 19,000 square-foot house.
The spouses filed for divorce in 2013, and they settled their case. However, Fatima isn't happy with the settlement. Fatima claims that the premarital agreement she signed was "procured by fraud."
Fatima now believes her ex-husband misrepresented his finances and that her ex-husband's attorney had been her counsel. She seeks a more even distribution of his estate.
The former basketball star is now paying his ex-wife: $150,000 to $200,000 for property payments, car payments and insurance premiums, private school and college expenses, living and personal expenses, plus $10,000 a month for his wife.
A pretrial date to argue the issues may take place on March 26, however, in the agreement both sides agreed to mediation, which began in February.
What can you learn from this example?
What Premarital Agreements Can Include
Premarital agreements can address the following issues:
- spousal support
- disposition of property
- protection from a spouse's debt
- protection of your estate plan
- establish separate businesses
- separate retirement benefits
- determine property distribution to the survivor
- protection of a family business, heirloom or future inheritance
What Not to Include in Your Prenuptial Agreement
What you cannot include in your prenuptial agreement:
- decisions regarding child support or child custody
- a waiver of your right to spousal support (CA law is a little unclear on this point. A waiver could be valid if ". . .executed by intelligent, well-educated persons, each of whom is self-sufficient in property and earning ability, and both of whom had the advice of counsel regarding their rights and obligations as marital partners at the time they executed the waiver . . .", see In re Marriage of Pendleton & Fireman, 2000 Cal. LEXIS 8581 (Cal. Nov. 1, 2000)
- preferences about chores and how to spend holidays
- details about child rearing
- ideal relationships with new in-laws
While negotiating a prenup, both parties need their own attorneys. Never let your spouse's attorney determine whether or not you should sign the agreement.
And no one can apply any duress whatsoever to encourage you to sign an agreement.
Make sure there is full and complete financial disclosure by both parties. Do not hide any assets from your fiancé, and he should not hide assets from you.
Finally, never try to prepare a prenuptial agreement without two attorneys.