You’ve probably heard of a “prenup” at some point in your life – short for a “Prenuptial Agreement.” It’s really just a fancy legal term for a contract between two people getting married. Prenups serve many purposes, but typically deal with the property (and debt) owned by the couple, and their rights once married. This helps provide clarity around what happens to property that pre-dates the marriage, especially if the marriage fails. So what is a mediated prenuptial agreement?

Prenuptial agreements can cause problems.

Creating a prenuptial agreement can be a very stressful and upsetting job. Often requested following a long term relationship, where the two lived together for a while, prenups abound. Once a couple gets engaged and starts planning a life together, two different visions emerge. One sees them sharing everything – including their financial assets. The other may have some nagging doubts about the financial aspect, although they still love them and want to share a life together. It may be that they are being pressured, by parents or other family and friends, or simply that they are more cautious. It does not mean they believe the marriage will fail, or don’t intend to try. However almost invariably, everything becomes ugly once a prenup is mentioned. The spouse expecting to share everything reacts with shock, and often hurt. The more cautious spouse may respond in kind, getting defensive, damaging the relationship for good. Even if the marriage goes on to last, a prenup forever alters things, especially for the less advantaged spouse. Not an ideal start to a marriage.

Mediation is the better way to negotiate a prenup.

Usually, prenup’s are negotiated with the aid of one or more attorneys. However, mediation can reduce or eliminate the damage to a relationship, compared with conflict-driven litigation. The mediation process lets the parties decide on terms themselves. The mediator helps level the playing field and help the couple come together for a mutual solution acceptable to both.

What is a Mediated Prenuptial Agreement?

The core value of mediation comes from the conviction that the parties themselves think about decide on terms. As the couple intends to marry, the process and terms should reflect love and care. Mediation helps prevent contamination of the prenup with the interests of attorneys, parents, and other “shadow parties” pulling strings behind the prenup.

How does a mediated prenup work?

To begin, both parties share information with each other and the mediator about their assets and income. This includes the moneyed parents of one of the future spouses, like future inheritance. In the case of parental wealth, one spouse may ask the other to waive all rights to inherited money coming from a parent, forever. However that spouse needs to know what they are waiving. If the assets of the parents are not revealed during the process, and waiver will be void once the information comes to light, and the relationship irrevocably harmed. Most importantly, prenups do not have to be an “all or nothing” decision. Any issue or property can be “sliced or diced.” For example, you can consider income from separate property (like a rental property) separate, or shared property. However the income could also be shared as a percentage – one spouse gets 60%, and the other 40%. You can change percentages overtime – they can start at some point after the wedding and then change as time goes on and the marriage proves itself durable. For example, a husband may own the house prior to the marriage, and at 5 years his wife might get 25% ownership, and at 10 years she might get an equal 50% ownership. You can also consider “sunset clauses” by which the prenup self-destructs and no longer applies after a certain number of years of continued marriage.

A generous prenup is good for everyone.

Many prenup omit a “mutual inheritance clause” to apply if one of you dies during the marriage. This ensures that the surviving spouse inherits all property – it is an important protection that signals love and care from a spouse for the other. The more generous in general a prenup, the more enforceable it will be in court. If you do end up divorcing, a spouse will have little interest in litigating a generous prenup. Courts also tend not to overturn prenups so long as they have reasonable terms and provide adequate security for the less moneyed spouse. Relationships can be damaged through the high-conflict process of creating a prenuptial agreement. It doesn’t have to be that bad. Know you know What is a Mediated Prenuptial Agreement! Mediation can provide an excellent alternative method for couples to get through this difficult journey and on to their marriage!

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