Prenup agreement can be roadmap to dollars and sense

Put yourself in Anna Nicole Smith’s stilettos.

At 26, you marry a Texas oil tycoon more than 60 years your senior. He dies a short time later. A decade goes by, and you’re still wrangling with your stepson over the multimillion-dollar estate, all the way to the Supreme Court this month. It could have been avoided if you and your octogenarian fiance had drawn up a prenuptial agreement.

Maybe it’s a stretch to imagine yourself in the former Playboy playmate’s situation. But with the start of the wedding season just a few months away, it’s a good time for engaged couples to consider whether a prenuptial contract is for them.

Basically, a prenup is a legal agreement signed before the marriage that details how assets will be divided in the event of a divorce or if one partner dies.

Lawyers and financial advisers say a “prenup” can spur financial discussions among couples and help them avoid disputes when married. Or, at least, it can make things smoother in a divorce. But a prenup is difficult for partners to bring up, and friction can ignite if both sides aren’t on board.

Nevertheless, lawyers and financial planners say couples increasingly are entering into such pacts.

“More people are getting married older and wealthier. And they have more to protect today than ever before,” says John Mayoue, an Atlanta divorce lawyer who represented Jane Fonda and Marianne Gingrich.

Business owners, for instance, want to make sure their enterprise remains viable even if the marriage doesn’t. Those on their second or so marriage often want to preserve assets for children from a previous union. And even first-timers will get a prenup if one partner has far more assets — or far more debt — than the other, lawyers say.

Eric Brotman, a financial planner in Timonium, Md., is drawing up a prenup with his fiancee. It’s his second marriage; her first. Brotman said the prenup will exclude his business from the marital pot. That way his business won’t be at risk of being liquidated if the marriage collapses.

“My clients and employees and all their families could suffer by my having marital problems,” the 34-year-old says. “I can’t let that happen.”

State law governs marriage, so the rules on prenups vary across the United States. But lawyers say there are certain characteristics prenups generally must have to avoid being successfully challenged if a divorce occurs.

• First of all, both sides must fully disclose assets and liabilities.

“You want to know what you are getting into and what you are missing out on,” says John Readey, a lawyer in Kansas City, Mo.

• Each person must be represented by independent legal counsel.

The agreement must be fair and reasonable. “It can’t be over-reaching,” says Richard Jacobs, a family lawyer in Towson, Md.

A millionaire, for instance, can’t insist that a long-time spouse be penniless after a divorce.

• One partner can’t coerce the other to sign a prenup.

Jacobs says he successfully challenged a prenup on grounds it was signed under duress. The lawyer groom had whipped out the contract for the bride to sign on the way into the ceremony, he says.

Timing is often an issue to avoid claims of duress. Partners need time to negotiate and understand what they’re signing. Mayoue advises broaching the subject six months before the wedding and finishing the prenup a month prior to the trip to the altar.

• Certain provisions don’t belong in a prenup.

These include spelling out who will clean the house, how often the couple will have sex or requiring that a mate can’t gain weight.

“They are not enforceable and they are silly,” says Susan Elgin, a Towson matrimonial lawyer.

Challenges to a contract are always a possibility. Even if Anna Nicole Smith had a prenup, it likely would have been challenged because so much money is involved. But challenges today are less successful than in the past, lawyers say.

“Ten years ago they were relatively easy to challenge and the judge had very, very wide discretion whether to enforce them,” Mayoue says. “Today, the national trend is, ‘Baby, if you sign it, we will hold you to it.”’

Even though lawyers and financial advisers agree prenups are necessary in some cases, not everyone is a big fan.

Jacobs and other lawyers say prenup negotiations can get rocky. Shouting breaks out. Some couples split up.

Individuals from wealthy families often blame their parents as the reason they are asking for a prenup, experts say. Sometimes the discussion goes easier if the prenup is raised as part of estate planning, others say.

Adding a sweetener also can remove any lingering bitterness.

Mary Maginniss, a financial planner in McLean, Va., says one multi-millionaire client entered into a prenup before marrying a woman with substantially fewer assets. But as a wedding gift, he gave $1 million to his bride, Maginniss says, so she would have some money in her own name.

Now, that’s romantic.