Just like preparing for a school presentation, preparing for a prenup mediation or negotiation will make the process go smoothly – but only if you know what to do! Before the big day, be sure to have a general understanding of the prenup laws in your state, create a budget, compile the correct documentation, and understand what you want out of your prenup. Unlike a school presentation, at the end of it, you’ll be starting the rest of your life with your love!
Have a general understanding of prenups in your state
A good place to start in preparing for a prenup mediation or negotiation is to understand the laws surrounding prenups in your state. Not all states have the exact same rules regarding prenups. For example, in New York, you are allowed to include child custody and support arrangements in a narrow exception that says it’s okay if the child is already born. On the other hand, most other states do not allow child matters to go into prenups in any case! Understanding the parameters of what can and cannot go into your prenup is important to negotiating what you want.
Create a budget and plan for costs
Mediation and negotiation aren’t free, of course. Many times, you are charged by the hour by the mediator or the lawyers doing the negotiations. This cost can rack up quickly if you spend hours and hours in negotiations. Especially with attorney fees!
First things first, set a budget. Understand what your max spending goal would be for this type of interaction. Then, choose a mediator or lawyer that fits within that budget. If your mediator costs $200 per hour, you may want to be cognizant of that when you hit the 5-hour mark (you’re now looking at a $1,000 bill).
One key component to preparing for a prenup mediation or negotiation is to compile the necessary documentation. There are a variety of different documents that you will need to bring with you, some of which we’ve listed for you below.
One of the first things to do in preparing documentation for a prenup mediation or negotiation is to compile a schedule of all assets and liabilities. The list should include a dollar value next to the asset. Assets may include things like bank accounts, investments, real estate, cars, and furniture. A schedule of potential inheritances should also be prepared. For future inheritances, you should speak with the person from whom you may be inheriting and ask them for the value if you aren’t sure.
Next, each party should create a list of all debts and liabilities. These include credit card balances and car loans, but they also include any outstanding student loans or medical bills that are not yet paid off. Again, make sure you include next to the listed debt the balance of the said debt.
Stock or equity documentation
Do you have stock options or equity in the company you work for? If the answer is “yes,” then you will want to gather the grant documents as to any stock or equity you may have as a result of employment, such as restricted stock units (RSUs) or stock options and deferred compensation.
Why do you need this? Because in a prenup mediation or negotiation, you will need to divulge all of your financial matters to your future spouse in order to create an enforceable prenup. If you leave out any information, it could hinder your prenup’s validity. This helps your spouse understand what rights they may be giving up in the prenup. Maybe you have a ton of future stock options in your company that could make you a millionaire one day; that information needs to be relayed to your future spouse.
Life insurance policies
If you have a life insurance policy already in existence, you’ll want to bring copies of these policies. Sometimes people want to make sure they will be taken care of in case their spouse dies, so they ask that mandatory life insurance be included in the prenup (Spouse A shall have a life insurance policy in the amount of $____ for the benefit of Spouse B).
Do you have debt? Credit card loans, school loans, mortgages, car loans, etc. For any type of debt you have, you’ll want to bring the statements to potentially show the balance.
Why? Because your future spouse needs to understand your debt. They can’t make educated decisions in the prenup if they don’t understand the full financial landscape of their future partner. What if you were in millions of dollars of debt? Your future spouse may have a different opinion on what they want to say about debt in the prenup.
Previous divorce documentation
If you were previously married, you should bring the final stipulation of settlement or court order and your judgment of divorce. This will help to inform any liabilities that you currently have for the support of a former spouse, support for children of your previous marriage, estate rights for the children of the former marriage, and perhaps a former spouse. Preferably your soon-to-be spouse will also have the same.
Don’t forget about those lovely tax returns! Make sure to get together your last three years of tax returns. This can be used to help with any calculations as to spousal support or waivers of spousal support. It can also be used to understand the income level of each spouse.
Give thought and discuss what you want out of the prenup
Before the mediation or negotiation, you will want to start considering what you want to get out of the prenup if you haven’t already. What is your main goal? Do you want to protect all of your assets? Or maybe just a future inheritance? Maybe you’re adamant about protecting yourself against your partner’s debt. Whatever it may be, make certain you know your objectives for the prenup before going into the mediation or negotiation. You may even want to list out your “must haves,” “nice-to-haves,” and “negotiables.”
If you and your soon-to-be spouse have already discussed the terms of the prenup (which you may not have, and that’s okay), you may want to bring a term sheet so that you can bring your ideas of what the prenup should include. A term sheet is a bare-bones document that bullet points all of the material objectives you want to accomplish in the prenup. It may include the following:
- What separate property now exists?
- What would you like to have remain separate property in the future?
- What will marital property constitute?
- How will you handle spousal support?
- How will you deal with separate liabilities, and what will that constitute?
- What are the existing debts, and what do you anticipate as future debts?
- How will you deal with future income?
- What will happen upon your death if you and your spouse are married and have or do not have children?
If you’ve already had a lawyer draft the first version of the prenup and/or had HelloPrenup draft your prenup, you should bring that to your meeting.
If you can take these few steps to make yourself more informed and prepared, then you will likely be ready to sit down with your spouse-to-be and begin to navigate the prenuptial process.
Remember, HelloPrenup has a built-in negotiation phase in our prenup platform that facilitates easy, at-home negotiation between you and your spouse. You can view any discrepancies in your decisions side by side and check them off one by one as you two privately negotiate your life. The best part of all? It’s affordable! You get a full prenup plus the negotiations for just $599 per couple.
Lisa Zeiderman is Managing Partner at Miller Zeiderman LLP, based in New York. A matrimonial attorney, CFL and Certified Divorce Financial Analyst, she regularly handles complex financial and custody divorce matters, as well as pre- and post-nuptial agreements. Named to the Crain’s New York list of Notable Woman Attorneys for 2022, as well as a Crain’s New York Notable Diverse Lawyer for 2022, a Hudson Valley Best Lawyer in 2022, a 2021 Best Family Law Attorney for Client Satisfaction by the American Institute of Family Law Attorneys, among many other awards, Lisa is a founding member of the American Academy of Certified Financial Litigators and a member of the panel for Attorneys for Children. Lisa is also a member of the Forbes Business Council.
In addition to authoring a well-read blog on Psychology Today, “Legal Matters: Understanding Mental Health Issues as They Apply to Divorce and Child Custody,” Ms. Zeiderman is regularly published in Financial Advisor Magazine, the New York Law Journal, and by the Forbes Business Council. She is also interviewed on issues ranging from financial empowerment to tax issues to child custody in a host of media. Ms. Zeiderman, a Fordham University of Law graduate, also serves as the Vice President of the Board of Savvy Ladies, Inc., and on the board of LIFT, Legal Information for Families Today.