How to Hammer Out a Prenup

First comes love, then comes marriage, then comes the reality show. At least that's the way it usually works for celebrities, especially when they marry one another. Of course a prenup is usually penned before any public personality says "I do."

The hullabaloo surrounding the made-for-TV wedding of E! reality show starlet Khloe Kardashian and Los Angeles Lakers' Lamar Odem calls into question the sanity of any celebrity -- no matter how far down the Hollywood food chain -- who weds without a prenup.

Despite the bling celebrities bring to the altar in pre-marriage assets, pre-nuptial agreements deal with the millions celebrities stand to earn over the course of the marriage and what each party stands to gain -- or lose -- should the union crumble. Prenups may get more publicity among high-profile pairs, but they provide much-needed protections for the 40 percent to 50 percent of first marriages that end up coming undone.

Here's how you can draw up an effective prenup to protect your assets, should you meet and marry your soul mate and it doesn't end as a match made in heaven but a typical Hollywood ending: divorce.

Step: 1

Lay your cards on the table. Crafting a valid prenup requires both parties to fully disclose their financial situation -- income, investments, assets and debts. Not fully disclosing your financial situation may result in a breach of contract. Both parties must be able to make an informed decision when signing a prenuptial agreement; if one of you keeps an ace up your sleeve making a fully informed decision is impossible.

Madonna's most recent ex-husband knew her net worth when he said: "I don't want a penny if this marriage dies." Jennifer Aniston and Brad Pitt reportedly decided against a prenup, but agreed to keep their finances separate and take their earnings with them should they split, which they did without a fight over finances.

Step: 2

Keep it clean. The agreements made in a prenup are enforceable only if the court deems that the terms are reasonably fair to both parties. Obtaining separate legal counsel helps accomplish this and gives each party unemotional, objective legal advice that provides piece of mind.
For example, including the right to perform random drug tests in a prenup may indeed be fair if your partner is a former addict and may be in charge of your children, but if your future ex-spouse has no history of substance abuse demanding random drug tests in your prenup will be less enforceable. The prenup between Nicole Kidman and former cocaine addict Keith Urban specifies that if Urban uses illegal drugs he will not net a penny of Kidman's $150 million fortune.

Step: 3

Avoid the cost of losing big without a prenup by spelling out spousal benefits. If one spouse works and manages to support the other through medical school and on to join a private practice, and it ends in divorce does the spouse that provided the steady support get half of the practice and the doctor's earnings? State laws differ on this; many states only split the assets acquired in marriage 50/50 after ten years of marriage.

Spell out monetary contributions like retirement benefits and continued health insurance. These details are important to maintaining your standard of living -- especially if you're the spouse working half-time, for lower wages, or raising kids while your spouse advances his or her career. Otherwise you may be left without relevant work experience and less than your fair share should the marriage dissolve under the pressure of a midlife crisis, health issues, downsizing, an empty nest or other factors.

Step: 4

Take precautions to protect what you have. If you want to protect your dignity should your spouse stray consider adding a cheating clause to your prenup.

Catherine Zeta-Jones' requirement for Michael Douglas: if he cheats, and she can prove it, Zeta-Jones receives a lump-sum payment of $5 million in addition to the $2.8 million a year in spousal support. Those without six- or seven-figure alimony may still require a modest "bonus" from a cheating spouse in a prenuptial agreement -- like demanding he surrender his Harley Davidson or she part with her closet of Channel bags. They may not miss you, but they'll surely miss their prized possessions.

Step: 5

Set a date. Of course you'll set a date for the wedding well in advance of the ceremony, but you should also set a date by which the prenup must be signed. Legally a prenup signed under duress can be contested in court, if one party feels pressured to sign the prenup because the wedding date is fast approaching then be forewarned that the prenup might not stand up in court. For this reason it is best to make sure the prenup is signed at least a month before the day of the wedding.

Source: Net