A family member is soon to get married. The couple had decided that they wanted a prenuptial agreement. Both work, but there are differences between the two in terms of student loan debt, expected inheritance, and expected future income. They don’t have a lot of money right now and didn’t want to spend $20,000 on lawyers (maybe that was the pre-Biden number?) for both sides to draft what ultimately would turn out to be a fairly standard prenuptial agreement. I did some research and found Hello Prenup, a Boston-based startup that, for $600, will run Web-mediated negotiations between the two potential victims. The company’s About Us web page shows a Chief Diversity Officer’s dream team:
I decided that my wedding gift to the happy couple would be to pay Hello Prenup’s bill.
First, it is odd that this company was founded in Maskachusetts. The state’s family law renders prenuptial agreements potentially useless. Even if a prenup is fair when signed, a judge can invalidate it via a “second look test”, evaluating the fairness at the time of the divorce (the “divorce” happens at the very end of what might be years of litigation, so the prenup could become unfair merely because, for example, all of the assets of the couple had been handed over to attorneys). A prenup in Massachusetts is more likely to lead to an extra $300,000 in legal fees (one side challenges the prenup; the other side has to defend against that) than a substantial change to the plaintiff’s profits. (Remember that a judge can work around an alimony waiver by simply awarding more child support, for example, or a larger share of the property.)
I like the idea of the site because it gives people nudges to work together to get to a finished document. Unfortunately, the flexibility is limited. For example, the options for alimony are (a) complete waiver, (b) leave it up to state law, and (c) waiver if the divorce lawsuit is filed before N years have elapsed and state law otherwise. In a country where people love alimony (apparently, since we keep voting for politicians who preserve the institution) there is no option to build in alimony via a formula. Suppose, for example, you wanted a formulae, e.g., lower earner gets alimony X% of the difference in income for Y% of the years prior to the plaintiff filing the divorce lawsuit. This is not doable except via editing the Word document after it is generated. What if you wanted to agree that if one spouse quits his/her/zir/their job to take care of kids for more than 2 years then the other spouse would pay 40 months of alimony in the amount of 50 percent of after-tax income? Not doable. (Remember that alimony is now tax-free to the recipient and not deductible for the payor, so old formulas based on pre-tax income would leave the payor destitute. The law changed starting in 2019 after the IRS noticed that alimony recipients were defrauding the U.S. Treasury on a regular basis by not reporting alimony received as income (payors, of course, were still deducting it).)
Hello Prenup doesn’t seem to contain enough education regarding what it takes to make a prenup valid. After using the service, the happy couple to whom I gifted the service wasn’t aware that sloppiness in disclosing existing assets could be an easy route of attack for a divorce plaintiff trying to invalidate a prenup.
Nit: Hello Prenup does a poor job generating Microsoft Word documents. It doesn’t use “keep with next” for section headings, for example.
It’s an interesting idea to interview each engaged person separately via the Web, but I’m not sure that the $600 service produces a better result than sitting down together at a single PC and using the forms that come with the $29 Nolo Press’s book on prenuptial agreements or by using various other free or low-cost forms from services such as Rocket Lawyer.
Maybe the answer is that Hello Prenup doesn’t have enough AI? I gave the following prompt to ChatGPT (GPT-4):
Give me an example prenuptial agreement between Robert and William. Robert is a 60-year-old Medicaid dentist earning $1 million per year while William is an unemployed 20-year-old. They plan to have children.
The result was a recipe for epic litigation. For example, “In the event of a divorce, Robert agrees to provide spousal support to William for a period to be determined, taking into consideration the length of the marriage and William’s employment status.” So the attorneys on both sides will argue in front of a judge what the appropriate period of alimony should be? They can also argue how long the marriage was (it can take 2-3 years for a divorce lawsuit to get to final judgment; does the “length of the marriage” include this period of litigation or not?).
ChatGPT also included the seemingly reasonable boilerplate “This Agreement shall be governed by the laws of the state in which the Parties reside.”
Does that mean the state in which the Parties reside at the time the prenup is signed? The state in which the Parties reside at the time that one sues the other? What if they don’t live in the same state either at the time of signing or at the time the lawsuit is filed? Hello Prenup generates agreements that are specific as to which state’s laws govern.
So… Hello Prenup has some deficiencies, but nothing like GPT-4’s!
If you’re considering getting married, don’t be distracted by foreign wars. Remember that, depending on the state where you choose to reside, you could be embroiled in a far more upsetting and personally costly war of your own in family court. A prenup offers a small degree of protection against this, though not against the most upsetting and expensive parts of a typical divorce lawsuit. The typical U.S. state sets up a winner-take-all battle between the two parents for who will (1) get to spend time with what used to be joint children, and (2) who will therefore get the river of cash that is associated with those children (“child support”; the flip side of this is “who will be forced to disgorge the river of cash while seldom seeing the children”). It is far more protective to move to a state such as Nevada that defaults to 50/50 shared parenting and limits child support profits than it is to work on and sign a piece of paper. For the typical married-with-kids person, it is far more dangerous to live in Maskachusetts or New York with an “ironclad prenup” than it is to live in a shared parenting state with child support profit limits with no prenup.
[Update: A friend provided the same prompt to GPT-4 today and it came up with a different clause for governing law…
Maybe ChatGPT has been going to law school?]
Related:
- Real World Divorce, especially chapters 5 and 7 regarding what can be the subject of litigation
It is far more protective to move to a state such as Nevada that defaults to 50/50 shared parenting and limits child support profits than it is to work on and sign a piece of paper.
Okay, silly question. Nevada borders California. What is to stop the wife-identifying spouse from abducting the child to California and declaring that the child is trans in order to end parental rights?
Steve: If the litigants aren’t married, e.g., Hunter Biden and Lunden Roberts, nothing stops one from moving to a more favorable jurisdiction before suing (as Lunden Roberts did by moving to Arkansas, where child support profits are unlimited). If it is one spouse suing the other, however, the (complicated) rules regarding venue favor the state where the two most recently lived together. If it were easy to get a different state’s court system and law, of course every Nevada plaintiff would hop JetBlue to Massachusetts and sue for $100,000 per year in child support as an opener!
This becomes more of a live issue when the parties are rich enough to own multiple houses. The plaintiff will always say “Even though we spent only 1 month on Martha’s Vineyard every summer, we both always considered that Massachusetts was our true home.” http://www.realworlddivorce.com/Relocation goes through some of this, but it is a head-spinningly complex subject. Don’t forget international, as well. The multi-national plaintiffs will try to get venue in the UK or the US for max profits.
https://www.businessinsider.com/why-london-divorce-capital-world-for-mega-rich-2019-7
It also reaffirmed London’s status as the de facto “divorce capital of the world,” at least for the rich and famous.
The UK court system is indeed the go-to destination for wives of the super-wealthy looking to divorce, mainly due to a legal tradition which is more favorable than most to the financially weaker party.
As Mark Harper, a divorce lawyer at Hughes Fowler Carruthers, told The Guardian in 2015: “If you’re the person with the money then most people will move heaven and earth to avoid a divorce in England because the law is much more generous to, typically, the wife, the person without the money.”
Ayesha Vardag, a divorce lawyer, told The Guardian that the UK is a fantastic jurisdiction for wives seeking divorce.
She spoke to the newspaper after representing Pauline Chai, a Malaysian model, in her divorce from the fashion tycoon Khoo Kay Pen, a case in which Chai won £64 million.
The UK court system is also favorable for the weaker party as longstanding pre-marriage assets — like inheritance or property bought before the wedding — is treated the same way as assets gained after marriage. This is not the case in many US states.
> my wedding gift to the happy couple would be to pay Hello Prenup’s bill.
@PhilG: you’re a true romantic!
Anon: most wedding gifts are never used so I am hopeful that this one falls into the same category!
Was hoping for a blog post on yosemite’s record number off marriage permits for millennials. Even a prenup is no way to escape a marriage. It really is for all eternity.
lion: Elon Musk escaped. It cost him more than $4 million in legal fees and his wife of 8 years, who had signed a prenuptial agreement, rejected an $80 million settlement offer. See https://www.businessinsider.com/correcting-the-record-about-my-divorce-2010-7