Houston Divorce Lawyer & Attorney : Cavers Law Firm : Texas Family Mediation & Adoption Lawyer

Long after the heartbreak has healed, one nagging question often remains: Who gets to keep the ring?

The engagement is over. In addition to the sorrow, the heartbroken must deal with the return of the deposits left with the caterer, the florist, and the dressmaker. But when all that dust has cleared, one rankling question often remains: Who gets to keep the ring?

For the answer -- or for vengeance -- many turn to the legal system. State courts around the nation that have considered the ring issue have reached differing conclusions.

When Is a Gift a Gift?

Courts generally treat the engagement ring as a gift, from the donor (the person who gave the ring) to the donee (the person who received it). To be considered a legal gift, three things must be present: the donor's intent to give the ring as a gift, the donor's delivery of it to the donee, and the donee's acceptance of the item. If the person to whom the ring was given can show all three elements, a court will consider the ring to be a gift to him or her.

Conditional Gifts

But the majority of courts also consider such a gift to be a conditional one. That means that, until some future event occurs, the gift isn't final; if that event does not occur, then the donor has the right to get the gift back. In real life, many parents use this concept by, for example, giving a teenage daughter the keys to the family car, on the condition that she maintain a certain grade point average for a specified period of time. If she doesn't make the grade, the keys must be returned.

Women who want to keep their engagement rings often argue that the condition needed to make the engagement ring a final gift is simply the acceptance of the proposal of marriage, not the completion of the marriage ceremony. That way, if the engagement is broken, the ring remains her property.

But this argument often loses. The majority of courts find that the gift of an engagement ring contains an implied condition of marriage; acceptance of the proposal is not the underlying "deal." Absent some other understanding -- say, that the ring is merely a memento of a great trip to Hawaii -- most courts look at engagement rings as conditional gifts given in contemplation of marriage: "Once it is established the ring is an engagement ring, it is a conditional gift." Heiman v. Parrish, 942 P.2d 631, 633 (Kan. 1997). However, the Supreme Court of Montana has come down on the opposite side of this fence, rejecting the conditional gift theory and declaring that an engagement ring is an unconditional, completed gift and that's that. Ex-fiances in that western state are unlikely to get help from the courts if they want to get an engagement ring back. Albinger v. Harris, 2002 WL 1226858 (Mont. 2002).

Fault for the Break-Up

When divining who gets to keep the engagement ring, courts do not agree on whether it should matter who did the breaking up or why. To some judges, it isn't fair that the donor should always get the ring back, especially if the donee stood ready to go ahead with the marriage and the donor broke it off. These same judges think it would be unfair for the donee to keep the ring if the engagement was broken because of the donee's unfaithfulness or other wrongdoing. In such cases, they order that the ring should be returned to its purchaser. This "fault-based" rule is the majority approach.

Other judges, though, think that the whole matter of who broke up with whom isn't any of their business. If the wedding's off, they say, the donor should get the ring back, regardless of who, why, where, or when the engagement ended. After all, they reason, no-fault divorce makes it possible for marriages to end without bitter court fights over whose fault it was; engagements should be treated the same way.

Just a few years ago, the Supreme Court of Pennsylvania stuck steadfastly to the no-fault reasoning and decreed that the donor should always get the ring back if the engagement is broken off, regardless of who broke it off or why. Lindh v. Surman, 742 A.2d 643 (Pa. 1999). Iowa, Kansas, New Jersey, New Mexico, New York, and Wisconsin have the same rule.

Justices on the Supreme Court of Kansas, which also adopted the no-fault rule in 1997, detailed the difficulties that they imagined would be theirs with a fault-based approach:

[S]hould courts be asked to determine which of the following grounds for breaking an engagement is fault or justified? (1) The parties have nothing in common; (2) one party cannot stand prospective in-laws; (3) a minor child of one of the parties is hostile to and will not accept the other party; (4) an adult child of one of the parties will not accept the other party; (5) the parties' pets do not get along; (6) a party was too hasty in proposing or accepting the proposal; (7) the engagement was a rebound situation which is now regretted; (8) one party has untidy habits that irritate the other; or (9) the parties have religious differences. Heiman v. Parrish, 942 P.2d 631, 637 (Kan. 1997).

But consider the case of George J. Pavlicic, a 75-year-old man, who had a romance with Sara Jane Mills, aged 26. They became engaged in 1949. He bought her a house, two cars, an engagement ring, and a diamond ring in anticipation of their marriage. George then lent her a significant amount of money, including $5,000 to buy a saloon. Sara Jane then disappeared. The next time she was heard from, she had indeed used the $5,000 to buy a saloon, but it was in another city, and she had married another man.

George went to court. He wanted everything that he'd given Sara Jane back. He won. But Sara Jane argued on appeal that a new law, the Heart-Balm Act, made his lawsuit illegal, because it outlawed all legal actions for "breaches of contract to marry." But the Pennsylvania Supreme Court sided with George. The act, it held, was meant to end a kind of legal blackmail, where people threatened lawsuits for breach of the promise to marry that would tarnish the other person's reputation. But the act, the court concluded, didn't alter the rule of conditional gifts. Pavlicic v. Vogtsberger, 136 A.2d 127, 130 (Penn. 1957).

Some courts applying this fault-based rule consider the exchange of the ring to be more like a contract than a conditional gift: The ring is just a symbol of the agreement to marry. If that agreement is not performed, then those involved should be restored to their former positions -- as they would be if the contract was for, say, the delivery of a bushel of wheat -- and the ring should be returned to the person who first had it. But if the donor backs out, the donee should keep the ring, because a person who breaches contracts should not be rewarded for doing so. Spinnell v. Quigley, 785 P.2d 1149 (1990).

Copyright © 2006 Nolo

Learn about the benefits of domestic partnerships -- and whether they may be available to you.

Despite the fact that it's estimated only 10% of American families are made up of a working husband, a stay-at-home wife, and children, our legal and social systems still provide benefits and protections based on that model. Having been left out of this structure, lesbian and gay activists in the early 1980s sought new definitions of family and recognition of their relationships -- and domestic partnerships were born.

Domestic partners are unmarried couples, of the same or opposite sex, who live together and seek economic and noneconomic benefits granted their married counterparts. In a few states, domestic partnership status is offered and regulated by the state and grants many of the rights and responsibilities of marriage -- generally limited to same-sex couples. In other places, domestic partnership is offered by smaller governmental entities or businesses and carries more limited benefits. In either case, benefits can include:

• health, dental, and vision insurance
• sick and bereavement leave
• accident and life insurance
• death benefits
• parental leave (for a child you coparent)
• housing rights and tuition reduction (at universities), and
• use of recreational facilities.

When a state, municipality, county, organization, private company, or university or college considers providing domestic partnership benefits, it must address several important issues: Who qualifies as a domestic partner -- should heterosexual couples be covered as well as gay and lesbian couples? How will an employer identify the employee's domestic partner -- by registration? Must the couple be together a minimum number of years? Must the couple live together? Must they share expenses? Must they be financially responsible for each other? How does a couple terminate their domestic partnership? (Note that even though most domestic partnership applications ask you to state that you are financially responsible for each other's needs, these applications are generally not considered binding contracts of support.)

In 1982, the Village Voice newspaper became the first private company to offer its employees domestic partnership benefits. The City of Berkeley was the first municipality to do so in 1984. In 1995, Vermont became the first state to extend domestic partnership benefits to its public employees. In 1997, Hawaii became the first state to extend domestic partnership benefits to all same-sex couples throughout the state. In addition, California, Connecticut, Maine, and New Jersey all now offer domestic partnership status to same-sex couples who register, with a wide variance in the type of benefits offered.

Today, a number of states and hundreds of municipalities, counties, private companies, organizations, colleges, and universities offer domestic partnership benefits. The complete list of institutions is extensive; the benefits offered by each is not, however. In some cases, all that is offered is bereavement or sick leave. In other situations, the benefits offered are comprehensive -- but also costly. Often, either the employee foots the bill for his or her partner, or the company pays (when it also pays for spouses) but the employee must pay taxes on the benefits. This is because the IRS considers benefits awarded to an unmarried partner as taxable compensation.

Copyright © 2006 Nolo

Learn what a living together contract is and whether or not you need one.

A contract is no more than an agreement to do (or not to do) something. Marriage is a contractual relationship, even though the "terms" of the contract are rarely stated explicitly or even known by the marrying couple. Saying "I do" commits a couple to a well-established set of state laws and rules governing, among other things, the couple's property rights if they split up or when one of them dies.

Unmarried couples, on the other hand, do not automatically enter into a contract when they start a relationship. If you want to legally establish how you will own property during your relationship, as well as what will happen if you separate or if one of you dies, you must write out your own rules. (Married couples do something similar when they create a premarital agreement. Your agreement will be legally called a "nonmarital agreement," but we prefer the term "living together contract.")

Some couples find it unromantic or depressing to even think about making a contract governing mundane details like money and property, particularly if doing so involves thinking about what might happen in the event of separation. But preparing a sound living together agreement can help you in a whole host of ways. Practically speaking, your agreement will help you avoid trouble when you mix your money and property, and it will make clear your intentions and expectations regarding property ownership, household expenses and the like. It can also greatly ease the division or distribution of property after a breakup or death. On a more personal note, the process of negotiating and drafting your agreement may well strengthen your abilities to communicate with and understand each other.

That said, here's an overview of the legal rules and practical concerns you should think about before drafting a contract of your own.

Legal Rules Governing Living Together Contracts

For the most part, courts and judges -- not legislatures -- have made the legal rules governing living together contracts. The leading court case is the well-known Marvin v. Marvin, 557 P.2d 106, decided by the California Supreme Court in 1976. It involved the actor Lee Marvin and the woman he lived with, Michele Triola Marvin. (She used his last name even though they weren't married.) In its decision, the court announced what were to become the common legal principles governing the right of unmarried couples to make contracts. First, the court ruled that marital property laws do not apply to couples who are not legally married. Then, the court recognized that unmarried couples are here to stay. Finally, the court declared four contract principles:

• Unmarried couples may make written contracts.
• Unmarried couples may make oral contracts.
• If a couple hasn't made a written or oral contract, the court may examine the couple's actions to decide whether an "implied" contract exists.
• If a judge can't find an implied contract, she may presume that "the parties intend to deal fairly with each other" and find one partner indebted to the other by invoking well-established legal doctrines of equity and fairness.

Although Marvin directly applies only in California, other states have upheld the application of these principles to contracts made by unmarried partners -- both straight and gay. Depending on the state, however, a court may follow different legal rules. Almost all states now enforce contracts between unmarried partners, although in some states only written contracts will be enforced.

Getting Help

If you're not sure whether living together contracts are valid in your state, you'll need to consult a lawyer or do some legal research of your own. Even if you know that you can make a legal agreement, there are some situations in which you should seek a lawyer's help. Get legal advice before signing an agreement if it involves a lot of money or property -- or complicated estate planning. This is just common sense, particularly if one partner has substantially more assets than the other. Also, you should get help if it might appear that one of you has much greater bargaining power than the other. A living together contract may not be enforced if a judge concludes that one person has taken unfair advantage of the other. For example, a court is unlikely to uphold a one-sided living together contract entered into between an experienced lawyer and an unsophisticated but wealthy 19-year-old who just moved to America and speaks little English, under which the immigrant agrees to support the lawyer.

When You Need a Living Together Contract

Obviously, you don't need a contract if you are in a brief relationship. But in a long-term and serious partnership, whether you're basking in the glow of having just "joined forces" or you've been together 20 years, you should consider the legal consequences of dealing with money and property. If you are planning to mix assets or share expenses, you should most definitely put your agreement in writing, especially if a significant amount of money is involved. If you're both stone-broke, with no property and little prospect of getting any soon, you can still benefit by deciding how you will handle money and property if it ever arrives. Also, you can put more emphasis on the practical issues of day-to-day living together, such as how expenses will be paid.

What to Include in a Living Together Contract

A living together contract can be comprehensive, covering every aspect of your relationship, or it can be specific, covering only one transaction (such as a new house purchase). These contracts need not be like the fine-print monsters pushed at you when you buy insurance or a car. You can, and should, design your contract to say exactly what you both want, in words you both understand. A simple, comprehensible and functional document using common English is much better than one loaded with "heretofores" and "pursuants."

If you want your living together contract to include personal details about your relationship, make two agreements. The first one should pertain only to property and finances. Then, if the worst ever happens and you find yourselves in court, the property and finance terms will be the only ones a judge sees. Write up a second agreement, if you wish, about who will do the dishes, who will walk the dog, how many overnight guests you'll allow and whose art goes in the living room. A court won't -- and shouldn't be asked to -- enforce this kind of agreement. In fact, if you do make just one agreement that includes personal as well as financial clauses, you run the risk that a court will be distracted by the personal clauses and will declare the entire contract illegal or frivolous, thus negating the more important financial clauses.

Here are the issues that couples most often include in a living together contract:

Property and Finances Clauses

Your living together agreement should cover all of your property -- including the property you had before you began the relationship, as well as the property either or both of you accumulate during it.

Property owned before living together. You each probably had some property before you met. Making an agreement about this property may seem unnecessary, but it's not. Think about trying to sort things out ten years from now, when you've both been referring to everything around the house as "ours." You can agree to keep all of your previously owned property separate, or you might want to share some or all of it with each other. Do what suits you best.

Property inherited or received by gift during the relationship. Many people will want to keep separate the property they inherit or receive by gift. Others will want to "donate" the property to the relationship. Again, it's up to you. Remember that any property given to both of you is legally owned by both -- this includes gifts you receive at a commitment ceremony or anniversary party, even if given by a relative or friend of just one of you.

Property bought during the relationship. Many people make purchases item by item, understanding that whoever makes the purchase owns the property. Purchases can also be pooled. A consistent approach to property ownership may simplify things, but is required by neither law nor logic. Some items may be separately owned, some pooled 50-50, and some shared in proportion to how much money each contributed toward the purchase price or how much labor each put into upkeep.

Expenses

Your agreement should cover how you want to handle expenses during your relationship. For example, how will you divide the day-to-day costs for food, utilities, laundry, housing and the like, especially if expenses increase or decrease? Here are a few suggestions about how to share expenses:

• Share and share alike. Many couples have only one checking account. They both deposit their paychecks into it and pay all household bills out of it. They figure it all evens out in the end.
• Split 50-50. Some couples prefer this method. When one partner buys something for the house or pays a bill, he writes his name on the receipt and throws it into a jar. Every few months, they empty out the receipt jar and total up how much each has spent. One then writes the other a check to even things up.
• Each contributes in proportion to her income. This works especially well for people with large income discrepancies.

Separation or Death

It's wise to include at least brief provisions in your agreement stating what will happen if you split up or if one of you dies. You may simply want to say that if you separate, each of you will have the right to take immediate possession of your separate property and that all jointly owned property will be divided equally. If there is property that you own together -- but not in equal shares -- you'll want to specify a method for dividing it between you.

Though it may be difficult to think about it, it's especially important to consider what will happen if one of you dies. Without properly prepared documents, members of an unmarried couple have no right to inherit property from one another. You can use your living together agreement to specify how you want to provide for each other; it will serve as strong evidence of your intentions. Be aware, however, that writing out a plan in your agreement is not enough. You should also use a will, living trust or other estate planning documents to ensure that your plan is carried out as you wish. For more information about ways to leave your property at death, see the Wills and Estate Planning area of Nolo's website.

Dispute Resolution

We recommend that every couple who prepares a living together contract include a method for resolving any disagreements that later arise out of it. Traditionally, it this type of dispute was severe, a couple had to go to court to resolve it, but there are better alternatives now. You may want to make mediation your first-choice method for resolving disputes, stating in your agreement that you will choose a third party to help you resolve any disagreements about your living together contract. If mediation is unsuccessful, you might allow either partner to submit the dispute to formal and binding arbitration. This should be enough to avoid the complications and expenses of a lawsuit.

What Happens to Your Living Together Agreement If You Get Married?

Your living together contract will be enforceable after marriage only if it was created shortly before your marriage at a time when you both planned to marry. To be enforceable, prenuptial (or premarital) contracts must be made in contemplation of marriage.

Copyright © 2006 Nolo

There are five tests you must meet to claim your partner as a tax dependent.

If you financially support your partner (heterosexual or same-sex), you may be able to file a tax return as a single person and claim your partner as a dependent. To be able to do this legally, you must meet the following five tests.

Support. The supporting partner must provide at least 50% of the other partner's total support for the year. Support includes food, shelter, clothing, medical and dental care, education, entertainment, and just about anything you can think of.

Citizen or resident. The supported person must be a U.S. citizen, resident alien, or citizen of Canada or Mexico.

Income. The supported person's taxable income cannot exceed $2,900. Nontaxable money, such as gifts, welfare benefits, and nontaxable Social Security benefits don't count toward gross income.

Relationship. Under IRS regulations, a person who lived in your home for the entire year can be considered a dependent as long as the relationship does not violate local law. Our advice: If you meet the other four tests but may be violating the law in a state where fornication, cohabitation, or sodomy is still against the law, go ahead and claim your partner as a dependent anyway. Recent court decisions have made those laws questionable at best, and the worst that can happen is that the IRS won't allow your deduction and your tax bill will be recomputed without the deduction.

Unmarried person. If the supported person is married and files a joint tax return with his spouse, the supporting partner in this relationship cannot claim him as a dependent. There's one exception: If the married couple did not earn enough to have to file a tax return and did so only to get a refund, the supporting partner can claim the dependent.

Copyright © 2006 Nolo

To allow your partner to take care of things for you if you can't speak for yourself, you must prepare the right legal documents.

If you ever become unable to make your own health care decisions or manage your own finances -- because of injury, serious illness, or advanced age -- you probably want your partner to step in and take care of you. Unfortunately, members of unmarried couples, unlike their married counterparts, often aren't permitted to handle medical or financial decisions for each other without signed authorization.

There are a few simple legal documents you should prepare if you want to ensure that critical decisions stay in the hands of your partner: health care directives and a durable power of attorney for finances. Without these documents, your partner may face tremendous emotional and practical problems if he or she tries to make health care decisions for you in the event of a medical emergency or handle a simple financial transaction on your behalf when you're not able to. At worst, your health care and finances may be placed in the hands of a biological relative who won't consider your partner's input. And this relative may well make decisions that go against what you want.

Fortunately, the documents you need are straightforward and usually easy to complete.

Health Care (Medical) Directives

Every state has laws authorizing individuals to create simple documents setting out their wishes about the type of medical treatment they want (or don't want) if they become unable to communicate their own decisions. These documents may also name someone to direct their care.

Health care directives are particularly important for unmarried partners, although married people should have them, too, to avoid conflict with other family members. If you don't take the time to prepare them and you become incapacitated, doctors will turn to a family member designated by state law to make medical decisions for you. Most states list spouses, adult children, and parents as top-priority decision makers, making no mention of unmarried partners.

A few states do include partners in their list of potential surrogate decision makers -- including Arizona, Delaware, Maine, and New Mexico. However, only New Mexico gives priority to a long-term partner. Other states make room for unmarried partners (sometimes classifying them as "close friends") only if listed family members are unavailable. And, in the few states where domestic partnership is available for same-sex couples, registered partners have priority over other family members. However, no matter what state you live in, you can save your partner a great deal of time and trouble by planning ahead.

There are two documents that permit you to set out your health care wishes, both grouped under the broad label "health care directives." First, you need a health care "declaration," a written statement you make directly to medical personnel that spells out your wishes for medical care if you become incapacitated. Your declaration functions as a contract with your treating doctor, who must either honor your wishes for health care or transfer you to another doctor or facility that will honor them.

The second document is usually called a "durable power of attorney for health care." In this document you appoint the person you choose -- most likely your partner -- to see that your doctors and other health care providers give you the kind of medical care you want to receive. You can also use your durable power of attorney for health care to give your partner (who may be called your "attorney-in-fact," "agent," or "proxy," depending on where you live) other rights to participate in your medical care, including:

• directing your health care under any circumstances that you don't specifically address in your declaration
• hiring and firing medical personnel
• visiting you in the hospital or other facility even when other visiting is restricted
• having access to medical records and other personal information, and
• getting court authorization to enforce your health care wishes if a hospital or doctor refuses to honor them for any reason.

In some states, your declaration and durable power of attorney for health care will be combined into a single document, often called an "advance health care directive."

You can make valid health care directives if you are at least 18 years old and of sound mind. Being of sound mind essentially means that you are able to understand what the document means, what it contains, and how it works. Physically disabled people may make valid health care documents; they can direct another to sign for them if they are unable to do so.

You may change or revoke your health care directives at any time as long as you are of sound mind.

Financial Powers of Attorney

A durable power of attorney for finances allows you to name someone you trust (called your "attorney-in-fact" or "agent") to handle your finances if you become unable to take care of yourself. Every state recognizes this type of document.

As with documents directing medical care, you should seriously consider making a durable power of attorney for finances if you want your partner to manage your money if you become unable to. If you don't prepare the document and you later become incapacitated, your partner or other family members will have to ask a court for authority over your financial affairs. These proceedings, called "conservatorship proceedings," can be time-consuming and expensive -- and they can be disastrous for unmarried couples if the court names another family member to take over, especially if your finances have been intertwined with those of your partner for a long time.

You can make your financial power of attorney effective immediately, or you can specify that it should go into effect only if you become incapacitated; the latter is called a "springing" power of attorney. While some people are more comfortable making a springing document, an immediately effective document holds a potential advantage for unmarried couples in a long-term, trusting relationship. If you make your document effective immediately, your partner can handle financial transactions for you at any time, even when you are not incapacitated. This can be useful if you are out of town, under the weather, or temporarily unavailable for any other reason.

When you make a durable power of attorney for finances, you can give your partner (or other attorney-in-fact) as much or as little control over your finances as you wish. The powers you grant may include:

• using your assets to pay your bills and everyday expenses
• buying, selling, maintaining, paying taxes on, and mortgaging real estate and other property
• collecting benefits from Social Security, Medicare, or other government programs or civil or military service
• investing your money in stocks, bonds, and mutual funds
• handling transactions with banks and other financial institutions
• buying and selling insurance policies and annuities for you
• filing and paying your taxes
• operating your small business
• claiming property you inherit or are otherwise entitled to
• hiring someone to represent you in court, and
• managing your retirement accounts.

Like health care directives, you can make a durable power of attorney for finances if you are at least 18 years old and of sound mind. And you can change or cancel your document at any time, as long as you are of sound mind.

Copyright © 2006 Nolo

by Shae Irving & Attorney-Mediator Katherine E. Stoner

Understand what you can accomplish by making a prenuptial contract before you marry.

If you're trying to decide whether or not to make a prenuptial agreement, you'll need to understand what this type of contract can -- and can't -- do for you.

What You Can Do With a Prenup

Prenuptial agreements are most often used for the following puposes:

Keep finances separate. Every state has laws designating certain kinds of assets accumulated during marriage as marital property or community property, even if these assets are held in the name of just one spouse. If a couple divorces, or when one spouse dies, the marital or community property will be divided between them, either by agreement or by a court. If you want to avoid having some or all of your individual accumulations during marriage divided up by a court, you can do so with a premarital agreement.

Protect each other from debts. Some of us bring debts, as well as assets, to a marriage. If there's no prenup, creditors can sometimes turn to marital or community property to satisfy the debts of just one spouse. But if you want to make sure that saying "I do" does not mean saying "I owe," you can use a prenup to limit your liability for each other's debts.

Provide for children from prior marriages. A prenup is helpful (perhaps essential) if either of you has children from another relationship and you want to make sure that your children inherit their share of your property. In a prenup, one or both spouses can give up the right to claim a share of the other's property at death, perhaps in exchange for an agreed upon amount of property.

Keep property in the family. If your property includes something you want to keep in your birth family, whether it be an heirloom or a share in a family business, you and your spouse can agree that it will remain in your family, and you can specify that item in your prenup. This can even include property that you expect to receive in a future inheritance.

Follow through by making your estate plan. In addition to using your prenup to waive inheritance rights and state your intentions for passing on your property at death, it's vital that you prepare the estate planning documents -- a will, living trust, and so on -- that actually transfer your property as you intend.

Define who gets what if you divorce. Without a prenup, state law will specify how your property will be divided if you ever divorce. These laws may dictate a result that neither of you wants. You can use a prenup to establish your own rules for property division and avoid potential disagreements in the event of a divorce. In most states, you can also make agreements about whether or not one or both of you will be entitled to alimony. Some states forbid or restrict agreements about alimony, however. (See "What You Can't Do With a Prenup," below.)

Clarify responsibilities during the marriage. In addition to the reasons listed so far, there are countless other uses for a prenup, depending on your circumstances. Here are some examples of other matters people include in their prenups:

• whether to file joint or separate income tax returns or to allocate income and tax deductions on separate tax returns
• who will pay the household bills -- and how
• whether to have joint bank accounts and, if so, how you will manage them
• agreements about specific purchases or projects, such as buying a house together or starting up a business
• how you will handle credit card charges -- for instance, whether you will use different cards for different types of purchases, what kinds of records you will keep, and how you will make payments
• agreements to set aside money for savings
• agreements for putting each other through college or professional school
• whether you will provide for a surviving spouse -- for example, in your estate plan or with life insurance coverage, and
• how to settle any future disagreements -- for example, you might agree to hire either a mediator or a private arbitrator.

What You Can't Do With a Prenup

There are some things you just can't -- or shouldn't -- do with a prenup. State laws differ as to what matters are considered off-limits. However, as a general rule, any agreement to do something that is illegal or against state-defined public policy will be considered unenforceable -- and may even jeopardize other valid aspects of the premarital agreement. Here are some things that you can't do, at least in some states:

Restrict child support, custody, or visitation rights. No state will honor agreements limiting or giving up future child support. The same holds true of agreements limiting future custody and visitation rights. This is because state lawmakers consider the welfare of children to be a matter of public policy and do not enforce any private agreements that would impair a child's right to be supported or to have a relationship with a parent in the future.

Give up the right to alimony, in a few states. A handful of states similarly limit your ability to give up your right to alimony -- also called spousal support or separate maintenance -- if there is a divorce. Other states permit such waivers, so you will need to know what your state laws say if you are considering this kind of agreement.

"Encourage" divorce. At one time, many courts viewed any prenup specifying how things would be divided up in case the couple splits as void and unenforceable because it promoted divorce. The modern approach allows such agreements, but judges in some states still take a hard look at them. If the agreement appears to offer a financial incentive for divorce to one party, it may be set aside.

Make rules about nonfinancial matters. For practical reasons, you should keep personal agreements out of your prenup. Here is a partial list of nonfinancial matters that sometimes find their way into prenups, but are better dealt with separately. Of course, the possible issues are endless and you may well think of many that aren't mentioned here:

• responsibility for household chores -- from laundry to cleaning to car care
• use of last names after you marry
• agreements about having and raising children, such as birth control, having children, children's names, child care responsibilities, and education
• how you will relate to in-laws or stepchildren, and
• whether you will have any pets and who will be responsible for them.

These kinds of nonmonetary agreements aren't binding in court, and in fact they could cause a judge to take your entire prenup less seriously. Rather than including personal matters in your prenup, you may find it helpful to simply make a list of your most important concerns and discuss them together. If you want to take it a step further, you can underscore your commitment by writing down your personal agreements in a separate document -- perhaps in a letter that each of you writes to the other, clarifying your intentions and wishes.

Copyright © 2006 Nolo

by Shae Irving & Attorney-Mediator Katherine E. Stoner

It may sound surprising coming from advocates of self-help law, but yes, you do need a lawyer when making a prenuptial agreement.

If you want to end up with a clear and binding premarital agreement, you should get help from a good lawyer. In fact, you will need two lawyers -- one for each of you. Here's why.

Our Anglo-American legal system views marriage as a matter of contract between two consenting adults. The terms of the "marriage contract" are dictated by the laws of the state where the married people live, unless they have a prenuptial, or premarital, agreement in which they set their own terms.

Varying State Laws

The laws governing marriage contracts vary tremendously from state to state. You can certainly do some of your own research to find out general information on your state's laws relating to prenups. But, if you don't want to invest your time learning the ins and outs of your state's matrimonial laws, a lawyer who knows the intricacies of those laws will be an important resource. The lawyer can help you put together an agreement that meets state requirements and says what you want it to say.

Independent Legal Advice

This explains the desirability of having one lawyer, but why two? Prenuptial agreements are still scrutinized by the courts, sometimes very closely. If you want your agreement to pass muster, having independent lawyers advise each of you can be critical. While most courts don't require that each party to a prenup have a lawyer, the absence of separate independent advice for each party is always a red flag to a judge. On a practical note, having separate legal advisers can help you and your fianc?ɬ� craft a lasting agreement that you both understand and that doesn't leave either of you feeling that you've been taken advantage of.

Decide What You Want Before Seeing a Lawyer

That said, it's best not to ask your lawyers to start writing up a draft or final agreement until the two of you have settled on its essential terms. You should put those terms in writing -- either in a written outline or a draft agreement you create yourselves. A prenup prepared by a lawyer who isn't working from terms you've both agreed on is likely to be one-sided and adversarial. If you provide your lawyers with an outline or draft prepared by both of you, the whole process -- and the final document -- will be more balanced.

All of this assumes that you select and use lawyers who are not only competent and experienced in matrimonial law, but who are also capable of supporting the two of you in negotiating and writing up a loving, clear, and fair agreement. Finding the right lawyers can take some time, but it's worth the effort.

Copyright © 2006 Nolo

By Shae Irving & Attorney-Mediator Katherine E. Stoner

These steps will help you decide whether a prenuptial agreement makes sense for you.

Whether to have a prenup is as personal and unique a decision as whether to marry in the first place. Here are a couple of things you can do to figure out whether a prenup is what you need.

Consider the Pros and Cons

Before getting to the specifics of your own situation, it can be helpful to look at the general pros and cons of making a prenup. We'll look at the good news first, then a few downsides.

Prenup Benefits

Making a prenup can:

• protect your separate property
• support your estate plan
• define what property is considered marital property or community property
• reduce conflicts and save money if you divorce
• clarify special agreements between you, and
• establish procedures and ground rules for deciding future matters.

In addition, creating a prenup may actually strengthen your relationship. While people often imagine that negotiating a prenup is potentially divisive, communicating about money matters can actually improve the quality of your relationship and support good communication in your marriage. Even if you don't end up signing a written agreement, just sitting down and hashing out the basics about money and property can eliminate misunderstandings that might otherwise create conflict. Remember that sooner or later you and your intended will be talking about money. If you think you can handle it, most psychologists and legal experts would tell you there's no time like the present.

Disadvantages of a Prenup

While there is a lot to be said for a carefully considered, clearly written prenup, there are some downsides to consider.

It's not romantic. Let's face it, a prenup is not romantic. Being engaged conjures up images of candlelit dinners and walks in the moonlight. Although marriage is a financial partnership as well as a romantic one, if you feel that discussing something as mundane as property and finances, as well as the possibility of divorce, will mar an otherwise beautiful time of your lives, you may not be candidates for a prenup.

The time may not be right. The need for a prenup is partly a question of timing. The issues covered in a prenup will probably arise sooner or later in your marriage: money management, property rights, responsibility for debts, estate planning. And if your marriage doesn't work out, you'll certainly need to deal with divorce decisions.

But making a prenup forces you to confront many of these issues now, at a time when your relationship may still be new and untested. Discussing what goes into a prenup could be unpleasant and stressful, leaving one of your with bad feelings about the relationship. (If now is not the time to make a written agreement, you may be able to make a contract after you marry (a "postnup"); but be advised that postnups have their own disadvantages, including stricter legal rules.)

State law may protect you without a prenup. The laws of your state may do a fine job of accomplishing what you want. For example, you may live in a community property state where assets owned before marriage are separate property and those accumulated during marriage are community property that is owned fifty-fifty. If this is essentially what you would want in your prenup, or maybe even better than what you expected, why go through the work of negotiating a prenup? Still, you'll want to be sure that you're not facing any special circumstances where your state law is unclear. Proceed to the next step and take a careful look at your situation.

Examine Your Situation

Now that you have an overview of the pros and cons, you can focus on the specifics of your circumstances and figure out whether a prenup is what you need.

Step One: Take a Prenup Quiz

If you or your fiance can answer yes to any of the following questions, there is a good chance a prenup would be helpful. If you answer no to every question, you might still benefit, but having a prenup might not be as critical.

• Do you own any real estate?
• Do you own more than $50,000 worth of assets other than real estate?
• Do you own all or part of a business?
• Do you currently earn a salary of more than $100,000 per year?
• Have you earned more than one year's worth of retirement benefits or do you have other valuable employment benefits, such as profit sharing or stock options?
• Does one of you plan to pursue an advanced degree while the other works?
• Will all or part of your estate go to someone other than your spouse?

Step Two: Identify Important Issues

Jot down on a piece of paper a list of the things you might want to include in a prenup, such as separate property identification, decisions about how you will handle money and property while you are married, whether alimony will be paid or waived in the event of divorce, retirement benefit agreements, and agreements about how you want to leave property at your death.

Common Prenup Topics

Here's a quick list of some of the issues that can be included in a prenup:

• separate vs. joint property
• estate planning issues, such as providing for children from prior marriages or leaving family property
• how to handle a separate business
• retirement benefits
• nonresponsibility for the other person's debts
• who gets what, including alimony, if you separate or divorce
• procedures for filing tax returns, including allocating income and deductions
• who pays household bills -- and how
• whether to have joint bank accounts and, if so, how to manage them
• agreements about specific purchases or projects, such as buying a house together or starting up a business
• how you will handle credit card charges
• agreements to set aside money for savings
• agreements for putting each other through college or professional school
• provisions for a surviving spouse in your estate plan or through life insurance coverage
• how to settle any future disagreements, such as with the help of a mediator or by a private arbitrator acting as judge.

Step Three: Assess Your Comfort Level

Next, ask yourself this question: On a scale of one to five, how comfortable am I with the idea of having a prenup? If you give yourself a one or a two, try to identify the reasons for your discomfort. If it is because you are uncertain how the terms of a prenup might compare to your legal rights without one, you may want to investigate the laws of your state before making a decision. If you are pretty sure you want a prenup and your discomfort comes from fear of starting an argument or offending your fiance, then you might take this as an opportunity to practice talking about difficult matters in a loving way. You may even find it helpful to work on communication and negotiation skills with a counselor who specializes in premarital counseling. The same is true if you don't think you want a prenup and you feel that your fiance is pressuring you to make one. This is a good time to practice communicating -- clearly and kindly -- about stressful issues. Whether or not you eventually make a prenup, you're sure to learn more about what you each need and want.

If you scored a three, four, or five on the comfort scale, you are ready to start talking specifics with your fiance. Even so, bear in mind that every good conversation involves some give or take. Don't assume that you and your fiance will see eye-to-eye on everything, especially when you first start talking. Allow plenty of time to talk -- and be willing to get help if you need it.

Copyright © 2006 Nolo

Learn some of the legal and practical ways that getting married changes your life.

Whether or not you favor marriage as a social institution, there's no denying that it confers many rights, protections, and benefits -- both legal and practical. Some of these vary from state to state, but the list typically includes:

Tax Benefits

• Filing joint income tax returns with the IRS and state taxing authorities.
• Creating a "family partnership" under federal tax laws, which allows you to divide business income among family members.

Estate Planning Benefits

• Inheriting a share of your spouse's estate.
• Receiving an exemption from both estate taxes and gift taxes for all property you give or leave to your spouse.
• Creating life estate trusts that are restricted to married couples, including QTIP trusts, QDOT trusts, and marital deduction trusts.
• Obtaining priority if a conservator needs to be appointed for your spouse -- that is, someone to make financial and/or medical decisions on your spouse?��Ǩ�Ѣs behalf.

Government Benefits

• Receiving Social Security, Medicare, and disability benefits for spouses.
• Receiving veterans' and military benefits for spouses, such as those for education, medical care, or special loans.
• Receiving public assistance benefits.

Employment Benefits

• Obtaining insurance benefits through a spouse's employer.
• Taking family leave to care for your spouse during an illness.
• Receiving wages, workers' compensation, and retirement plan benefits for a deceased spouse.
• Taking bereavement leave if your spouse or one of your spouse?��Ǩ�Ѣs close relatives dies.

Medical Benefits

• Visiting your spouse in a hospital intensive care unit or during restricted visiting hours in other parts of a medical facility.
• Making medical decisions for your spouse if he or she becomes incapacitated and unable to express wishes for treatment.

Death Benefits

• Consenting to after-death examinations and procedures.
• Making burial or other final arrangements.

Family Benefits

• Filing for stepparent or joint adoption.
• Applying for joint foster care rights.
• Receiving equitable division of property if you divorce.
• Receiving spousal or child support, child custody, and visitation if you divorce.

Housing Benefits

• Living in neighborhoods zoned for "families only."
• Automatically renewing leases signed by your spouse.

Consumer Benefits

• Receiving family rates for health, homeowners', auto, and other types of insurance.
• Receiving tuition discounts and permission to use school facilities.
• Other consumer discounts and incentives offered only to married couples or families.

Other Legal Benefits and Protections

• Suing a third person for wrongful death of your spouse and loss of consortium (loss of intimacy).
• Suing a third person for offenses that interfere with the success of your marriage, such as alienation of affection and criminal conversation (these laws are available in only a few states).
• Claiming the marital communications privilege, which means a court can?��Ǩ�Ѣt force you to disclose the contents of confidential communications between you and your spouse during your marriage.
• Receiving crime victims' recovery benefits if your spouse is the victim of a crime.
• Obtaining domestic violence protection orders.
• Obtaining immigration and residency benefits for noncitizen spouse.
• Visiting rights in jails and other places where visitors are restricted to immediate family.

• Copyright © 2006 Nolo