Prenuptial Pacts a Smart Safeguard in Later-Life and Second Marriages

In retrospect, the Long Beach resident says, it was one of the smartest things she ever did. Her second marriage ended in divorce. The prenuptial agreement is the primary reason she was able to keep her house and pension in the bitter split. It also helped save her from having to pay spousal support to her long-unemployed ex, she says.

Couples planning to walk down the aisle a second time may want to take note. A formal premarital agreement may not be necessary in a traditional first marriage, but couples who have children from previous unions and substantial assets are frequently advised to put their financial promises in writing before they tie the knot.

This caution applies to a widening swath of Americans. In 1970, the vast majority of unions were first marriages, but today the numbers are nearly evenly split between first marriages and marriages in which the bride, groom or both have been through the process before, according to Census Bureau statistics. Those second marriages often are between adults older than 35, who are far more likely to have something to lose.

Cox is by no means alone in taking steps to protect those assets. There are no statistics on how many prenuptial agreements are written, probably because they do not need to be filed until they're enforced, attorneys say. But here's a hint: The best-selling book in Amazon.com's marriage category in 1999 was "How to Write Your Own Premarital Agreement."

"Kind of funny, isn't it?" says a publicist at Source Books in Illinois, where they hang the congratulatory plaque. "We put out all these books on love and marriage, and this is the bestseller."

The rising interest in prenuptial agreements is a good thing, contends Violet Woodhouse, a Newport Beach-based attorney and author of "Divorce and Money" (Nolo Press, 2000).

All marriages eventually will end, either through death or divorce. If it's a second marriage with blended families, either conclusion can prove unhappy for the survivors if the couple has not made a financial agreement in advance, she says. State laws kick in when the couple has no legal agreement to the contrary, and those laws can subrogate children's interest to the interest of a stepparent in the event of death. In divorce, they can enrich a jettisoned spouse, even if the union was short and rocky.

There is no set formula for what ought to be stipulated in a premarital agreement, Woodhouse says. However, for any such pact to be valid, you need three things:

* First, you must give adequate notice. You cannot present a premarital agreement to your prospective spouse in the limousine on the way to the wedding and expect it to hold up later, says Monica Braun, an attorney and a financial advisor with American Express Financial Advisors in Long Beach. Both parties should have a chance to carefully consider the document and have it reviewed by their attorneys.

* The second absolute requirement is disclosure, attorneys say. Not only must both parties list their respective assets, but they need to show each other documents, ranging from credit card bills and tax returns to brokerage statements and pension print-outs, detailing what they have and what's being keep separate. In fact, if you write your own premarital agreement, Michigan attorney and "Premarital Agreement" author Edward A. Haman suggests that you attach these documents to your contract.

* The third essential is a marriage plan or "statement of intent," Woodhouse says. This should spell out who the parties are, what they bring to the marriage and what they intend to share. Anything that's precious and requires protection should be included. There is no formula for this step, attorneys say. However, it is important to contemplate whether you and your spouse plan to have children and whether one of you will stay home with them, Woodhouse says. How will the couple handle money when one is no longer earning an income?

If there are children from a previous marriage, how will the couple handle issues of inheritance? You generally don't want to leave money directly to a minor because expenditures must go through a guardian, who will need to get court permission for each expenditure.

In some instances, parents will leave the children's inheritance to the former spouse, with the written or spoken understanding that the ex will use the money to support the kids. But in cases where the broken relationship is too acrimonious or the ex can't be trusted, another adult or a trust may be used.