10 Information Gathering, Preparation For, and Negotiating the Terms

• Library: Premarital Agreements: Drafting and Negotiation (ABA) (2017 Ed.)

10 Information Gathering, Preparation for, and Negotiating the Terms

§10.01 Overview

This chapter addresses some of the practical problems in the representation of a client seeking a premarital or a postmarital agreement or who has been presented with such an agreement. The lawyer's conduct of the representation will differ according to whether he or she is representing the party who seeks to initiate a premarital agreement—the proponent—or the other party and whether there is a significant disparity in resources or the parties are in comparable bargaining positions. When the couple is older and each person has sufficient resources to provide for his or her own needs, often they both want an agreement, their bargaining positions are more or less equal, and they share the objective of keeping their assets separate. By contrast, where there is a significant financial disparity or a big age difference, or when the parties are young, entering into a first marriage, and may have children, the matter can be more challenging to resolve. The negotiations may require a significant amount of lawyer time, often compressed into an uncomfortably short span of time.

Other considerations come into play when the parties are already married and are considering entering into a postmarital agreement or an amendment to a premarital agreement. One such consideration is the reasons for seeking an agreement—for example, they intended to enter into a premarital agreement but ran out of time and were unable to complete the negotiations before the wedding, they are estranged and want to enter into a postmarital agreement that will govern their rights if an attempt to reconcile fails, or they have been married for a number of years and want a postmarital agreement as part of their estate planning. Another consideration is the parties' current circumstances, including age and health, and whether a spouse's capacity may be diminished.

Parties often wait to initiate the process of getting a premarital agreement until later than is ideal. Thus, one of the primary challenges for counsel for the proponent of a premarital agreement is to gather sufficient information, draft an agreement and make revisions requested by the client, provide the proposed agreement to the other party, and then conduct negotiations, all while the wedding date is quickly approaching.

§10.02 New Client intake

When a new potential client calls to make an appointment for a premarital agreement, the lawyer, or the staff person who handles such matters, will need to obtain certain information immediately to determine whether he or she can consider taking the matter. In addition to the name of the fiancé(e) to do a conflict check, the lawyer will need to find out whether he or she will be drafting the agreement, or reviewing an agreement prepared, or to be prepared, by the other party's lawyer. The lawyer will also need to know the planned wedding date. If the date is close, the lawyer should explore with the potential client whether postponing is an option or whether the parties would consider a postmarital agreement.¹ The closer the wedding date, the more cautious the lawyer should be about accepting a representation.

The lawyer needs to be particularly wary about agreeing to represent a weaker party for a premarital agreement when the wedding date is close, especially if the agreement has not yet been drafted. Without seeing the proposed terms, the lawyer may not be able to assess adequately whether he or she will have sufficient time to do a competent job until the representation is underway. The lawyer's decision to withdraw later, due to inability to carry out a competent representation, will likely mean leaving the client without a lawyer. Moreover, when a stronger party deliberately waits to present an agreement until close to a wedding date that cannot be postponed, it is often because he or she intends it to be a take-it-or-leave-it agreement. There is little the lawyer for a weaker party can contribute in this circumstance, except to advise the client not to sign.

Assuming the lawyer decides to see the potential client, he or she will need to begin immediately to gather the facts relevant to the representation. A questionnaire that the client can fill out ahead of time and bring to the first meeting can be quite useful.

§10.03 The initial consultation

(a) Information Gathering

The lawyer for a proponent will need to gather a substantial amount of information about the client and his or her fiancé(e) at the initial consultation.² Among the types of information counsel will need to gather are the following:

• Prior marital history, including whether a party has children he or she wants to provide for, and whether he or she has financial obligations to a former spouse or a child. When a party has a defined benefit pension plan and has been married before, counsel will need to find out if a prior spouse has a right to a share of the benefit and whether he or she is entitled to a survivor benefit.
• If the parties are already married, and have been for some time, the history of the current marriage; what prompted the decision to seek a postmarital agreement; any history of marital misconduct; any history of domestic violence, threats, exercise of unreasonable control, or economic pressure; and any history of financial misconduct;
• Education, current employment, and, in some cases, employment history. Among other things, this information can help counsel evaluate a party's level of sophistication and experience in legal matters, contracts, financial and investment issues, and other related areas. It may also help identify retirement benefits that will need to be considered and disclosed.
• Citizenship and, if not a U.S. citizen, visa status (especially whether a party is in the United States on a fiancé(e) visa);
• If a party's first language is not English, the extent of his or her study of English and the length of time he or she has lived, worked, or studied among English speakers;
• Ages of the parties;
• Parties' health;
• Amounts and sources of income of each party;
• Assets and liabilities of each party;
• Whether a party expects an inheritance or has an interest in a trust or estate;
• Whether the parties are likely to have children together and their expectations about whether one of them will leave the workforce to care for them;
• Whether each party has sufficient resources to provide for his or her own future needs independently of the other party;
• Whether there is a significant disparity in the parties' assets and resources;
• Whether a party has a business or professional services practice that he or she wishes to preserve from spousal claims;
• The likelihood of a party needing nursing home care; the expectations of the parties regarding their care at the end of their lives; provisions previously made for meeting long-term care needs, such as long-term care insurance; whether a party may need Medicaid to pay for nursing home care; and the effect this may have on the other spouse and his or her financial security;
• Whether parties have plans to move to another state and, if known, where;
• To the extent known, the parties' plans for the near future, such as a plan to retire;
• The ability of each party, especially the less wealthy party, to acquire assets in the future through savings from employment, future inheritances, family gifts, and other means;
• In addition, counsel will need to explore the client's goals and objectives in seeking an agreement, and, to the extent known, the fiancé(e)'s or spouse's objectives.

(b) Client Questions About Premarital Agreements

At the initial consultation, the lawyer will need to give advice about the law relating to premarital agreements and answer client questions. Below are some frequently asked questions about premarital agreements and suggested answers. These can be adapted for a client considering a postmarital agreement.

What is a premarital agreement?

A premarital agreement is a contract entered into by a couple who plan to marry. It determines their rights regarding property and support when the marriage ends, whether by death or divorce. Some premarital agreements provide that each party will keep all money earned and property acquired before or after marriage; in other words, what is his is his, and what is hers is hers. Other agreements provide for each party to keep premarital and inherited property and for property acquired through their efforts during the marriage to be shared. Some agreements provide for one spouse to make transfers of cash or property to the other spouse or provide for alimony for a dependent spouse in the event of divorce.

Do I really need a premarital agreement?

Every married couple has a premarital agreement. State laws provide certain property rights for a surviving spouse after the first spouse dies. State laws also provide for division of property if the parties divorce and for support for a spouse who is unable to support him or herself. In that sense, state law is the parties' agreement. Some couples choose to write their own agreement to meet their own objectives and reflect their own values rather than leave it to state law to determine their rights at death or divorce.

My fiancé(e) asked me to sign a premarital agreement. Doesn't that mean

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