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Frederic Edwin Church, Sunset Across the Hudson Valley (detail)
Prenuptial agreements can be very troublesome for a couple that is thinking about one (or working on the terms) when embarking on a marriage. Sometimes such agreements can cause more problems than they intend to fix. One of these is that the negotiations between the couple at a time when they are preparing for a wedding can be very hurtful and upsetting for both of them. Negotiating about money has the potential for making them financial adversaries, at a time when they are filled with love for each other and preparing to marry.
When they try to discuss the finances of their marriage in preparation for a prenup, the discussions can get very “hot” and unproductive. If they turn to lawyers (each will need their own representation), sometimes the situation becomes much worse.
Prenuptial Agreement Mediation is a method of assisting a couple in working out the terms of their prenuptial agreement. It entails a number of meetings (nowadays, on Zoom) between the couple and the mediator. The mediator functions as a neutral in the room, and helps the couple have productive discussions about the various financial terms they are considering. Because the mediator is trained in conflict resolution, the mediation process can greatly reduce the stress and sense of betrayal that prenup negotiations often engender.
Mediation is defined as a form of conflict resolution. It falls under the rubric of Alternative Conflict Resolution (ADR), because it is often used as an alternative to litigation. (Other examples of ADR are Binding Arbitration, Nonbinding Arbitration, Collaborative Law and Collaborative Divorce.)
WithIn the prenup context, the couple is working toward trying to come together both emotionally and financially prior to their wedding date. They are not trying to litigate! As such, in this context, the mediation process and mediation techniques can benefit them greatly as they begin their discussion of the possible terms that will be included in their prenuptial agreement in a united and diplomatic manner.
There are great advantages in using mediation to begin the process of creating a prenuptial agreement.
The mediator is usually a lawyer well-versed in divorce law, estate planning, and business law. Based on the mediator’s experience, the mediator can provide information about financial options that are available to the couple that they may not be aware of.
The mediator is a neutral facilitator who can guide discussions in a productive manner. Mediators are trained in various mediation techniques. One of these is to “level the playing field.” This means that the mediator will make sure that a less verbal or less financially experienced future spouse gets to express what he or she is thinking in the discussions. A mediator is also a teacher in a sense, who can help explain to the couple the legal and practical features of various types of assets, such as trusts (including irrevocable trusts and QTIP trusts), LLCs, subchapter S corporations, and other legal entities and asset types. These may be part of their asset profile, or may be discussed in terms of their future financial planning, some of which can be specified in their prenup.
A mediator is trained to ascertain what self-interests may lie behind the words that the mediation clients are saying as their stated concerns. These deep interests may include concerns about financial security, financial fairness and financial independence. Once they are put forth from a non-partisan perspective, these concerns can be discussed in a much more productive way, leading to tangible results – progress in formulating the terms that will be in the prenup.
This is how mediation can provide a great sense of relief to both parties when negotiating a prenuptial agreement. The beauty of the process is that they are discussing the terms face-to-face with each other, but with the guidance of an informed and expert neutral.
The Term Sheet. As the couple starts to work out the financial decisions that will be included in their prenuptial agreement, a term sheet begins to be drawn up. This is an outline written in simple English, not legalese, which lists the financial terms that the couple wishes to include as part of their plan to address the financial matters within their marriage. At the end of the mediation, this term sheet will become the basis of the actual written and signed prenuptial agreement.
Choosing an attorney. When entering into a prenup, most couples engage their own separate reviewing attorneys, since this will be one of the most important contracts they’ll ever sign in their lives. And also, because the mediator does not represent either of you, the mediator cannot give you individualized legal advice.
In the mediation process, the mediator can assist you to identify appropriate attorneys who are aligned with your values as expressed in the terms you have chosen for your prenup. The attorneys will also write up your prenuptial agreement in accordance with state law.
Laurie Israel, Esq. is one of the national leaders in the field of prenuptial agreement mediation. She helps couples by mediating prenuptial agreements in Massachusetts and also nationwide. She writes frequently about the technique and benefits of mediating prenups, and is a frequent presenter at conferences and workshops on the topic of prenuptial agreement mediation.
Laurie Israel began her practice of law as a tax lawyer over 35 years ago. She is admitted to the bar in the Commonwealth of Massachusetts, and is also admitted to practice in Federal courts, including the Supreme Court of the United States. She is a Martindale-Hubbell AV Preeminent Attorney®.
Over the years, her practice of estate planning and divorce led her to an interest and concentration in prenuptial agreements. She has become one of the preeminent national experts on prenuptial agreements, and has been a presenter to conferences on the topic of prenuptial agreements and mediating prenuptial agreements nationwide.
Laurie has written a comprehensive book on prenups, “The Generous Prenup: How to Support Your Marriage and Avoid the Pitfalls” (Amazon). This book was written with the laperson in mind, but is also used by attorneys and mediators as a comprehensive and fair-minded guide to this often thorny topic.
Laurie now confines her practice to prenuptial and postnuptial agreements. She helps people by mediating and consulting about prenups all over the country, as well as representing clients in Massachusetts.
To contact Laurie Israel, email her at laurie@laurieisrael.com, or use the contact page.