More and more couples use prenuptial agreements

They are not just for the rich and famous

- As the busy summer wedding season approaches, it's a good time to consider a document with a decidedly ominous reputation -- a prenuptial agreement.

"It sounds so unromantic," said Beth Appelsmith, a Sacramento, Calif., family law attorney, who's done dozens of premarital agreements. "But the negative connotations come from celebrity cases, the ones that go bad," she noted, like that of San Francisco Giants baseball player Barry Bonds, or the current, contentious case of Los Angeles Dodgers owners Frank and Jamie McCourt, whose prenuptial agreement has been at the heart of the couple's multimillion-dollar divorce.

In fact, the term has become so synonymous with loveless legalese that veteran family law attorneys like Hal Bartholomew prefer to call them "marital agreements" -- "because it's a more positive word."

Nationally, the number of couples signing prenuptial agreements appears to be growing and the economy could be a factor.

In a survey of American Academy of Matrimonial Lawyers members released last September, 73 percent said they have seen an increase in "prenups" during the past five years. Also, 52 percent reported more women requesting prenups and 36 percent said pensions and retirement benefits are more commonly cited.

Who needs one?

"If all you have is an apartment and a paycheck, then you don't need a prenup," Appelsmith said. "But if you have real estate, a business, children from previous relationships, then you do need one."

Appelsmith, who has seen a slight increase in prenup requests the past few years, said it might be worthwhile for a couple to have a one-hour consultation with an attorney before deciding whether a prenup is needed.

Nolo Press , which published a how-to book on prenups, recommends that couples do some homework together, writing a draft of their financial preferences before heading to a lawyer's office.

Basically, a prenuptial agreement states your wishes for how your marital assets and debts would be handled, in the event of divorce or death. Older couples with children from previous marriages, established businesses or complicated investments may want to spell out which assets go where, often as part of their estate planning.

It's all about how you approach it, says longtime lawyer Bartholomew, who's done 50 or 60 prenuptial agreements over the years. "Too often I've seen agreements where one side has a buddy who's a lawyer. The agreement is very sterile or approached like it's a business arrangement."

But prenups are not an emotionless contract. "This is different: This is a couple in love with each other. ... I like the empowerment of couples making these (financial) decisions together," Bartholomew said.

He and Appelsmith are advocates of so-called "collaborative" agreements, where a couple sit down, each with an attorney, to amicably devise a financial agreement that works for both sides. The emphasis is teamwork, not adversarial.

Appelsmith said it can also be helpful to have a neutral financial planner or adviser on hand to discuss the tax implications and financial strategies that might be involved.

And while it's commonly assumed that prenups are only for the wealthy that is not necessarily so, say family law attorneys.

Sacramento attorney Dena Bez, who executed five or six prenups last year, said many of her clients are blue-collar couples with modest incomes.

"Because of the economic climate, they're hesitant to get into a relationship that could affect their credit scores or expose them to debt collection," said Bez. "They want to insulate themselves from a partner's debts."

In one case, a middle-aged couple wanted a prenup because one had a clean credit history but the other had large amounts of credit card debt. Their prenup stipulated that each person's income and debts remain separate.

What's required in a prenup? It must be in writing. Both sides must wait seven days before signing. Each person must fully disclose all their assets and their debts.

Perhaps the best outcome of a prenup is that it gets couples talking about their finances before saying "I do."

"If a couple has a chance to talk about their expectations around money, they should be able to minimize conflict and surprises during their marriage," said Appelsmith, who's seen how financial differences can lead to divorce.

"Some people think it's kind of crass to talk about money," she noted. But if two people have completely different ideas about how to handle their finances, the process of setting up a prenuptial agreement "can actually generate harmony."

Ultimately, a prenup is insurance in case happily-ever-after doesn't happen.

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