Premarital Agreements: Ken gambles early and Donna late; who wins?

January 17, 2013, by

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In June of 2001, maybe with Yellow by Coldplay emitting from his car radio, Ken proposed to Donna. She declined. He tried again in early September, this time with success.

Ken wanted Donna but he also wanted a written premarital agreement with her. He was wealthy, with a net worth of about $77 million. She worked as a waitress, although she also owned some real estate.

In his then-unjustified confidence Ken had had his attorney draw up a premarital agreement in June. It got shelved until she accepted on his second try.

Promptly upon her assenting, Ken and his attorney had the two lovers meet with a mediator September 6th, without counsel present. It is not clear whether any written draft was presented, or printed financial statements. This meeting is a little unusual, at least in your editor's experience, particularly if it were done without the sharing of numbers. A seeming agreement was reached, on Ken's required provision for Donna in the event of their divorce or his death.

There was some further negotiation after that, with each of these Washingtonians relying on his or her own attorney. The deal that was struck and signed on September 14th would make unlikely the formation of community property, and give Donna $25,000 for each year of marriage and a bonus of $500,000 if the marriage lasted at least four years before they were divorced or before Ken died. If she earned the bonus it would be paid over 20 years. They promptly flew to South Dakota (more on this unlikely state in a bit) and were married on the 19th.

Ken was of course the one with the most to lose if the validity of the premarital agreement were tested later, and he was taking a risk in signing only five days before the wedding. To make it even chancier, their financial statements still remained offstage (were not appended to the written agreement).