CNBC -- Business Center
June 12, 2003

Importance of prenuptial agreements
Sharon Epperson

Well, June is traditionally the busiest month for weddings and many couples spend months or even years planning for that special day, scouting locations, listening to bands, trimming down that guest list. But couples spend little or no time talking about or planning for their financial life together. And they rarely discuss what would happen if they divorce, although 50 percent of marriages end up that way. In tonight's Financial Fitness, Sharon Epperson talks about the importance of prenuptial agreements and tells you how to write up a prenup.

SHARON EPPERSON reporting:

Dallas pediatrician Carolyn Ashworth loves kids, and when she married for the second time two years ago, she wanted to make sure her own adult children were protected.

Dr. CAROLYN ASHWORTH (Signed Prenup): We did accumulate things during our previous marriages, and we felt it was only fair that they have those things.

EPPERSON: Her husband, Barney Auton was also divorced, and didn't think twice when Ashworth uttered the P-word, suggesting they sign a prenuptial agreement before the wedding.

Mr. BARNEY AUTON (Signed Prenup): I had no problem it with. It's just another form of a marital contract much like the vows you take and it made a lot of sense to me that everything was spelled out.

EPPERSON: A prenup is a binding contract that spells out in advance what happens to a couple's finances, assets, debts and property in the event of death or divorce.

Mr. COURTNEY KNOWLES (Equality In Marriage Institute): They need to talk about how they're going to fund their household, who's going to handle the responsibility of paying the bills and taking care of their investments.

EPPERSON: The prenup can override state, family and probate laws and non-financial lifestyle issues can also be put on paper.

Mr. DAVID BACH ("Couples Finish Rich" Author): People who put in prenuptial agreements how many times a week they're going to have sex, people who put in prenuptial agreements what happens to the goldfish if you get divorced.

EPPERSON: Celebrity prenups seem as common as celebrity divorces, from actors and athletes to wealthy CEOs. But these contracts aren't reserved for the rich and famous. Many women are initiating prenups these days and it's not only those with high-powered careers.

Ms. ARLENE DUBIN (Sonnenschein Nath & Rosenthal): Your more traditional woman who--who's g--who plans to stay home and--and take care of the children, very often she will ask for the--the prenup to ensure that her non-monetary contributions to the marriage will be compensated and that she will share 50-50 percent in the assets.

EPPERSON: New York attorney Arlene Dubin and her husband Bud Rosenthal keep their prenuptial agreement in a Tiffany bowl in their living room.

Ms. DUBIN: It has sentiment value because it was an enabler, it was one of the things which enabled Bud and I to get married.

EPPERSON: They intend to stay married, but still followed what Dubin, author of "Prenups For Lovers," calls the three rules of prenups, to ensure the courts will uphold the agreement if they divorce. Each had their own attorney, they agreed to full and fair disclosure and they finished the prenup at least 30 days before the wedding, so there would be no question that these were hasty decisions. It's easier than doing a will, say Ashworth and Auton, who spent less than $2,000 putting their prenup together.

Dr. ASHWORTH: And then in the--the terrible tragic event that you--your marriage does end in divorce, you feel like you are going to be in a safe harbor.

EPPERSON: Now prenuptial agreements are legal contracts and they are fully enforceable if they're prepared correctly. You can also terminate the contract and you can amend it, say you inherit money or property and you want the prenup to reflect that. Just make sure both parties have their own attorney and that both of you sign it and you probably also want to have the agreement notarized. Now if you decide not to sign a prenup, having a conversation about money before you get married is still a good idea. You can take a look at Arlene Dubin's book, "Prenups For Lovers" for tips on how to bring up the P-word and what to include in the prenup. The Equality In Marriage Institute also has advice on what it calls the commitment conversation. You can download the workbook from their Web site at www.qualityinmarriage.org.

And we love getting your comments and suggestions, so please continue to e-mail us at bizcenter@cnbc.com. And watch Financial Fitness every Thursday right here on BUSINESS CENTER. Sue.

HERERA: Thanks so much, Sharon.

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