Jun 27, 2019. A Prenup For The Rest Of Us: Rethinking The Premarital Agreement

What do you think when you hear the word “prenup?” If you are like most people, when you hear prenup you might think rich or celebrity. And you’d be right. Prenups, or as they are called by family lawyers, premarital agreements, are often used by those with significant assets, actors, entertainers and others with much to lose in a divorce. The legal fees to create a prenup can cost $5,000 to $50,000 or more, and are much more palatable for the wealthy.

This is unfortunate, however. I think the use of a prenup should extend beyond the rich and famous. My goal is to make the case for a “prenup for the rest of us.”  This prenup for the rest of us would be an affordable legal document completed before marriage that protects the interests of men and women of average wealth from the fighting and legal jockeying that often occurs during divorce. It is not uncommon for a divorce to cost more than the expense of a wedding and honeymoon. A clear and precise prenuptial agreement reduces attorney fees and accounting costs in the event of a divorce.

Humans are really good at forming relationships– however you define a relationship and however short it may last. We are hardwired for love and connection. So while we are masters at coming together, we are terrible at separating well. The neurotransmitter-induced high we experience when the relationship is new makes molehills out of mountains, but when we are divorcing the claws come out and we seek blood. The rational and logical part of our brain gets hijacked by our emotions, which means it is probably not the ideal time to have a calm and sensible discussion about who owns what. In a relationship I had many years ago that was ending, I remember arguing over a cookie sheet. Yes, a $10 cookie sheet. It is no wonder that when hundreds of thousands, if not millions, are at stake, couples lawyer up and dig in for a long and expensive fight. According to Paul J. Nelson, Esq., a Certified Specialist in Family Law and Managing Partner at Nelson Kirkman, a boutique law firm in Newport Beach, California, "I have seen couples with only half a million in assets pay upwards of $250,000 in combined attorney fees fighting over issues that could have been pre-determined in a simplified prenuptial agreement."

As it is, once you file for divorce each spouse must make certain income/expense and asset/liability disclosures to the other. But why wait until you are going through a divorce to make these disclosures? Wouldn’t it make a lot more sense to do this before marriage? The adage that in criminal court you see bad people at their best, and in family law court you see good people at their worst, is accurate. The advantage of listing all of your assets and debts before you get married is that nothing has been commingled yet, and if it has because of cohabitation, this is the time to make it clear who owns what. This has the potential to reduce arguments about the division of assets and the massive legal and accounting fees often required to make your case.

Mr. Nelson states, "By assigning property to each spouse at the outset of the marriage, the parties will undoubtedly save energy, frustration, time, and money. Under California law if a party owns property prior to marriage, it will be separate property upon divorce. Problems arise when refinances occur during marriage or loan principle is paid down using community property funds. These are expensive and difficult things to prove in court especially after a marriage of longer than 7 to 8 years as documents are simply not available. A prenuptial agreement would control and obviate the need to try to find documents that just may not exist any longer."

Furthermore, I would also argue for not just a one-time disclosure of assets and debts before marriage, but for annual disclosure – maybe make it part of the federal tax return. As assets are acquired or sold and finances change, there would be a documented trail of ownership. As an added benefit, annual disclosure would protect unsuspecting spouses. One of the tragedies of divorce is when one spouse has been financially unfaithful – maybe they have substantial gambling losses they kept hidden or they have a large credit card balance unbeknownst to their spouse. In a divorce, each spouse is jointly liable (this means each spouse is 100% responsible for payment) for these debts. When it comes to income tax debt, even the IRS – who rarely is linked to compassionate in a word association game – provides some protection through “innocent spouse relief.” But your other debtors in a divorce will hold the innocent spouse fully liable. This can create a world of hurt for the spouse trying to start a new life.

But wouldn’t all this talk of financial disclosure and a prenup for the rest of us be bad for a nascent relationship? Awkward maybe, but I don’t think it would be bad. In fact, I think it could be beneficial to talk about money, assets, and finances before and during a relationship. If the research that shows money disputes are the best predictors of divorce are correct, I think disclosure will lead to more discussions and better understanding.

As a divorce financial planner who often works with the “out spouse” – the spouse who is not experienced handling the finances – I see the effects of financial furtiveness and it is not pretty. I’ve never worked with a client going through a divorce who lamented, “I wish I knew less about our finances during the marriage.” Financial disclosure increases the opportunity for understanding and involvement. If the captain is steering the ship into rocks, the earlier you see the problem the better the chance you can save the ship and your life.

Of course traditional prenups include more than asset and debt disclosures. A well-drafted prenup also often tackles issues such as how assets obtained during marriage should be divided in divorce, marital support, how to handle separate debts, etc. These are all things that could also be disclosed and/or discussed in a prenup for the rest of us document, but at a minimum, I would start with an asset and liability disclosure requiring both spouses to acknowledge and sign annually.

These disclosures are required in a divorce, so why not make them requirements when you get a marriage license? What do you think? Good idea? Bad idea? How can we make divorces less like the financial weapons of mass destruction they normally are and at the same time protect spouses in the process?

 

by: Robert Pagliarini, Contributor Forbes. Dedicated to retirees, business owners, and sudden wealth recipients.

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Situations in which a child support modification may be warranted

The  noncustodial parent either loses his or her job or gets a promotion,  has another child or receives a big inheritance. Or maybe the shared  child starts starts attending a better school or begins participating in  more expensive extracurricular activities. These are all examples of  situations in which one or both parents may wish to see out  modifications to a child support agreement.

Child support is  intended to replicate the level of financial report would have been  available to them to cover their expenses had his or her parents never  separated. A lot of different factors shape how much the custodial  parent is awarded to take care of their child, including how much income  each party receives and how many other kids a parent has to support.

Britney Spears Not Concerned With Child Abuse Charges

2009: Britney hangs poolside with her two young sons.

2009: Britney hangs poolside with her two young sons.

LOS ANGELES – Britney Spears is reportedly the subject of a new investigation pertaining to allegations that she abused her two sons, Sean Preston and Jayden James. However, inside sources have said that the troubled pop princess and her management are not concerned over the claims, apparently made by her former bodyguard, Fernando Flores.

According to the British paper The Sun, Flores approached investigators with the allegations that Spears beat one of her young sons with a belt, and fed them both food they were allergic to which in turn made them violently ill. He also claimed he had no choice but to resign from the job as a result of Spears’ “erratic” behavior.

 “(Flores’ claims) are simply not true. There are always people around Britney, nannies and such, so she is never alone with the boys, and would never even have the opportunity to do something like that. She’s very loving of the kids,” a source close to the Spears camp told Pop Tarts, adding that the former guard was perhaps retaliating as a result of being fired from his position, and that neither Spears nor her manager, Larry Rudolph, were concerned about the allegations because they were simply “unfounded.”

Another source, who previously worked with the starlet, agreed that she is the target of a bitter former employee upset by the loss of his job.

 “Britney may have been a little out of control herself sometimes, but never would harm her babies, never in a million years would she hurt them,” said the insider.

Following a period of bizarre behavior and a seemingly reckless lifestyle, Spears lost custody of her sons in October 2007.  She has since regained more visitation rights, wherein her boys reside both with her and their dad, Kevin Federline.

Although the Department of Children and Family Services (DCFS) were regulars at Britney’s home during the time when her mental stability came under intense scrutiny, we’re told that she is now “totally clean” with the department. According to a report from Radar Online, social workers made a visit to the Spears home and will not pursue any charges against her.

A rep for Kevin Federline declined to comment on the allegations, and a rep for Spears did not return our calls or e-mails.

Nonetheless, if Flores’ allegations are proven by authorities to be accurate, the potential outcome for the pop princess is pretty dire.

“ 'Beating’ them could be classified as domestic violence under the domestic violence family code and the domestic violence prevention act. If it was found to be domestic violence, then there could be some severe problems such as restraining orders,” Newport Beach-based Family Law Attorney, Paul Nelson, explained. “If the issue did not rise to that level, and was instead considered negligent parenting and physical abuse, Spears could be ordered to take parenting classes, and visitation rights could cease. The courts may make her undergo a 730 evaluation under the evidence code where you have a psychiatrist analyze and make recommendations as the court appointed expert.”

Unfortunately, this isn’t the first time Spears’s parenting skills have become a source of speculation.

In March, the songstress was spotted arriving at her office with mother Lynne Spears, while her kids popped their heads out of the car. Last year, the sons were boating with mama Britney in Miami – sans life jackets, and back in 2007, Spears was caught behind-the-wheel with her cell phone in front of her face, taking an evening drive as her sons slept in the backseat.

In 2006, she caused quite a commotion after being pap-snapped driving with her infant son on her lap,  and according to the New York Post, in 2008 Spears not only smoked in front of the then 2-year-old Sean Preston, exposing his young lungs to the danger of second-hand smoke, but allowed him to play with her lighter and packet of Marlboros.

Additional reporting by Deidre Behar.

Does remarriage impact how much child support I receive?

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If  you married young and jumped right into having kids, then it's possible  that, over time, you found your feelings for your spouse waning. Now  that you're older, you may feel as if you have a better grasp of what  you're looking for in a partner and be ready to remarry.

The good  news is that you don't have to sacrifice getting married again just  because you wish to continue receiving child support to take care of  your kids. You also don't have to tell your new spouse that you can't  help contribute to building a life together, adopting or supporting  their kids, or even introducing new ones to the mix because of a fear  that you'll lose it.

Tags: Child Custody

Divorce Tip #22

In California Does it Matter Who Files for Divorce First?  No!....  Since California is a no-fault State for divorce actions most divorce attorneys agree there is no advantage to file first.  The first to file is called Petitioner and the other is Respondent.  At trial usually the Petitioner will put on their case first and have last say at closing argument.      

Except:      

1.) If property is in danger of being unilaterally depleted by one party, a divorce filing puts into effect automatic temporary restraining orders more commonly known as ATROS.    ATROS are standing mutual court orders to both parties that become effective upon service of the summons in a dissolution and remain in effect until judgment.   They are found in California Family Code Section 2040 and are summarized on the back of the divorce summons.   

 2.) If you live in different counties then filing first likely will keep the case near you negating the need to travel for every court hearing or trial.    3.) If you live in different States you likely will litigate in California.  There are many exceptions to this but understanding the options is certainly helpful.  

Do you need the help of a forensic accountant during divorce? January 30, 2018 by Paul J. Nelson, Esq

In  most divorces, the two most difficult areas to resolve are child  custody and asset division. The more marital assets a couple has accrued  over the years, the more difficult it can become to fairly divide those assets.  Certain assets may prove more difficult to locate or place a value on,  while confusion about marital versus separate property could result in  incomplete asset inventories going to the courts.

If you have any  reason to think that your spouse may have hidden assets in the weeks or  months leading up to your divorce filing, you need to protect yourself.  Hiding assets in an attempt to prevent splitting them with a spouse is a  very common practice. Due to their nature, it can be quite difficult to  track down hidden assets. For many, working with a forensic accountant  is the best option when there's potential for hidden assets in a  divorce.

Benefits of accepting certain assets over others when you divorce January 30, 2018 by Paul J. Nelson, Esq.

When  your marriage starts to crumble, it's normal to be concerned about  what's going to become of your assets once you divorce. This is  especially the case if you run a successful business, are nearing  retirement or have some other types of valuable assets.

One  mistake divorcing spouses make, though, is assuming that all marital  property is worth what its face value is. If spouses go with what its  value on paper is, they're likely to later feel less confident that they  received an equal split of the marital assets.

Tags: Complex Divorce & Property Division