It was not like it was his first marriage. Indeed, it was his third and his last divorce had been a brutal affair in which he had fought for years against his exspouse. His own family had sided with the woman he was divorcing then. When the dust settled after that divorce, Arnold had lost much of his money, most of the custody of his children and his relationship with his own mother. He did not speak with his mother again for over a decade.
True, his very first marriage had ended in a mutually agreed upon divorce settlement and neither he nor his wife of the time had much money to fight over and no children. They had actually stayed friends. But you would think the second divorce would have taught him that a prenuptial agreement made very good sense. He was an intelligent, gifted businessman who knew how to negotiate contracts that would protect him and provide efficient and effective relief if things went wrong.
So I was taken aback when he told me on the phone that he had no intention of even considering a prenuptial agreement. “I spend my life being cautious. Taking minimal chances. Being prepared for the worst. That’s what I do twelve hours a day. Not now and not with Betty. This one is going to last…”
“That’s what you said with Eleanor, right? It always seems like it’s going to last forever. You know that. Otherwise you wouldn’t be getting married.”
“This one is different. We are made for each other. Life mates. I know that sounds juvenile. But I believe it. I have never loved like this. This one is forever.”
I looked out my office window at the hundreds of other windows filled with men and women staring at computer screens, typing away. It was odd to hear such love and commitment being expressed from Arnold, a tough customer in any negotiation, and odd to be in an office setting hearing about romance in any event. I wondered if such a setting allowed for understanding his depth of emotion. Can one hear love poetry while sitting in a three piece suit in the financial district and really hear it? So I paused and he took that pause for argument.
His voice was defensive. “Look, you and I are not kids. You and I have been through some very tough times and very tough fights. You know I am not naïve.”
“Usually you are not…”
“And life is not just about being careful. You, of all people, know that. You go out on that idiot sail boat into the ocean and risk everything so you can be miserable and wet and have some adventure…”
“I’m not miserable out there. And I take precautions. I have safety equipment…”
“Your best safety equipment would be to stay at home. You go out there because you want to experience some risk. You’ve told me that…”
“Marriage is not a risk sport. It’s not a test for bravery.”
“No? In some ways it is. For me, at least. Scares me plenty. After what I have been through. And maybe that’s why I don’t want to play it safe. If I am making a commitment, I’m making a commitment…”
“You can make a commitment as to love and caring and not have that also be a commitment to put all your money at risk, Arnold. What does one have to do with the other? Can’t you love her without putting your neck in a financial noose if things go wrong? Does she have any wealth?”
“Not a dime, really. A job but she’ll probably quit that since we both want kids.”
“Child support will be set by the court regardless of any prenuptial.”
“Don’t I know it…”
“So all we are talking about is limiting alimony and not having your separate property commingled so that it becomes all community property. We can provide terms that if you stay married for a certain number of years you will agree to pay alimony for X dollars over Y time…that is often a fair thing to do…and you can provide her life insurance to make sure she and the kids are protected…but with a prenuptial agreement at least we know what your exposure will be and we keep community property isolated from what you have built up over your life already.You won’t suddenly find that all your business you had when you married is slowly but surely half owned by her. You don’t even have a buy and sell agreement…”
He began to laugh. “OK, counselor, calm down. I know what I am risking. I’m a veteran of the divorce wars, you know…”
“You are. But I think it was a Greek philosopher who commented that the time we need the most intelligence and logical analysis is when we have it the least…when we chose our wife…”
“There is more to life than intelligence and logic. You know that. Where is the logic in sailing on the ocean and spending hundreds of thousands for a five mile per hour boat to do that…” He laughed again.“You’re as crazy as I am. Just about different things…”
“I’m not risking all my assets by sailing…”
“No, you’re risking your life. That’s even dumber than what I am planning to do, And I know what I am doing. I am choosing this with eyes wide open. I am…” He paused for a minute, thinking about how to phrase it. “I’m putting it all on the line. All. I am voting for this marriage working and voting with all I have…”
I could hear the absolute conviction in his voice. “I’m impressed, Arnold. I have to admit I’m impressed. This is not like you. I admit I have admiration for that commitment. You really have to be in love to do that.”
“I am. But it’s more than that. I can’t really explain it. I want to change my life, my outlook, my sense…my personal sense of caution. I take chances in business all the time. I want…I want to take a chance in this, to make that type of…of plunge, I guess.”
He was my friend as well as my client and I knew him well enough to know that he had made up his mind and was not going to change it. There was a long pause on the line. Then, with amusement, he said, “And if I am wrong, well you can tell me you warned me. You can say I was a fool for love and got what I deserved. And if it works, I will tell you that lawyers are so damned cautious that they should write their lives with pencils, not pens.” He laughed and hung up. They were married six months later. With no prenuptial agreement at all.
Twenty two years later I said to him, “You were a fool for love. But you didn’t deserve this…” I meant it.
Betty, or more accurately, her lawyer, had ruined them both. And by ruin I mean that after five years of bitter and constant legal warfare arguing over a fifteen million dollar community estate, the fight left him with less than a three hundred thousand in his name and she with less than a hundred thousand. By then they were in their sixties. Not enough time for him to rebuild his wealth, as he sadly commented. As for her, she was doomed to a life of near poverty with no career and no prospects. She would live on his alimony.
Much of the cost was attorney fees and the costs of the litigation. That cost millions. But equally destructive was the internecine warfare within the various businesses they owned. As an owner via community property, her vote was needed for numerous business decisions that had to be made. She was instructed by her lawyer not to agree to business decisions that were critical for the well being of the businesses. One by one, the businesses faltered and failed, being sold for a fraction of their worth.
Why would her lawyer insist upon self destructive acts that would hurt his own client? Each time he may have thought that Arnold would give way, would offer more to her in the divorce settlement to save the business itself. And each time Arnold refused and another business was ruined.
That’s what I thought at the time, at least. Perhaps a year later I happened to meet her lawyer in court and he could tell from my demeanor that I was disgusted by what he had done in the case. He pulled me aside in the hall way of the court room. He was a dapper fellow, well known for high value divorces, a protégé of a lawyer now dead who I had rather liked who had taught me much about buying peace as the marriage dissolves.
“Hey, it wasn’t my fault. Don’t blame me.”
I said nothing.
He went on. “I told her she was nuts. Hell, she was nuts. Convinced he had buried money somewhere and would dig it up to settle if we kept pushing.”
“And your discovery found nothing. You saw all his accounts and brokerage accounts. So why not stop?”
“You aren’t getting me. I don’t mean she thought he had hidden accounts. I mean she thought he had actually buried money in some hole. I kid you not…”
I stared. She had been a smart woman, capable of handling a complex household and raising their two kids with Arnold. Excitable, perhaps, but not subject to delusion. He could tell I was not convinced. He glanced around the hall way and pulled me further down the hall.
“Look, a lot of what happened was privileged. I can’t tell you that, obviously. But she lost it and if you talk to your client, he’ll tell you that’s true. She was absolutely convinced he was having an affair…”
“I know he would not do that. Never occurred to him…”
“Well, I don’t know what occurred to him, but we never got evidence one way or another. But she was convinced and was going to punish him no matter what it did to her. She isn’t stupid. But she was going to punish him and destroyed his businesses to do just that…”
‘And destroyed her own businesses at the same time…”
“As I told her. But she wasn’t going to listen to me. After all…he had the money in the hole in the backyard…” He laughed without much humor.
“Meanwhile, you earned well over a million dollars in fees…”
“She still owes me several hundred thousand, you know. And I think I can get the court to order that he pays for that…”
I started to turn away. He still pulled on my arm. “Look, your guy is no saint. I don’t know if he had an affair, but he hit back pretty hard in that case. She was in deposition for over two weeks. They gave each other body blows…”
“He was both desperate and angry. What do you expect him to do?”
He shrugged. “Well, I’m not the devil and I do what the client tells me to do. She wanted revenge. She got it.”
“Does she still think he has money buried in the back yard?”
“Damned if I know. She hardly speaks to me. Blames me for what she decided to do on her own. Be glad you weren’t counsel on this case…”
“You made plenty of money…”
“Lord knows I earned it.” He grinned and left.
Perhaps unrelated, Arnold had a massive heart attack about six months later but survived it and continued to try to rebuild his wealth.
So, when the young couple was sitting in front of me discussing prenuptial agreements perhaps eight months after Arnold’s heart attack, I had some difficulty keeping silent as they explained why they felt they did not need much of an agreement if any. After all, they were in love. Their parents had not ever divorced and why look for trouble by preparing for something that might never happen?
“It’s a personal decision,” I said, “but one that perhaps is made without understanding the real unnamed party to the agreement that one must guard against. You think you are making an agreement only between yourselves…but the person that could cause you real problems is not even a party to the agreement.”
They looked at me surprised. She spoke first. “I don’t understand. It’s our marriage and our lives…”
“But the person you are guarding against is not your husband or even your in-laws. It’s his lawyer if there is ever a divorce…for his lawyer makes his money by fighting and without this agreement, it is likely there will be plenty to fight about…”
“But we hardly own anything now…”
“This agreement lasts until your marriage ends or you both agree to void it. It could last thirty years. Fifty years. Do you think you will own anything in thirty years? By then this agreement will probably pertain to many millions of dollars.”
“You think we will be millionaires?” she said laughing. “And if we negotiate now we need lawyers in our lives now. Two lawyers at least, you said.”
“Usually each person has a lawyer.”
“And that’s expensive. And I doubt if we will have that much money…ever…even in thirty years .”
“I can almost guaranty you will. You buy a house in the Bay Area, you are already taking on an asset worth half a million or so. In thirty years you will own it outright. Your pension plans are part of what you own. Your life insurance. I would be shocked if they don’t exceed half a million in value in a few decades. And with inflation even being three percent a year, your home will double in value in fifteen years alone.”
That made them look at each other. I kept going. “As for keeping lawyers out of your lives. Yes, you need two attorneys now. But a divorce has two attorneys as well and last years and to spend several hundred thousand dollars in fees and costs is not unusual. If we put an arbitration clause in the agreement, it will probably be over in a few months. That cannot handle child support, but it can address all the issues of property. And if we put in a clause stating that the winning party gets attorney fees, your lawyers may be much less inclined to spend all your money on the fight. You have less lawyers in your future by using them a bit more now.”
They nodded but didn’t look happy. I was not surprised. Everyone hates having to negotiate these agreements. When all is close and loving…and both are a little nervous about the big commitment they are making…to sit down with lawyers and accountants and discuss what happens when there is a divorce is not only contrary to emotions, but leads to stresses and tension.
“Everyone hates doing these,” I commented. They both nodded quickly at that. “And many just decide to forget it. They will risk it. Again, it’s a very personal decision. But just think of it this way. You are anxious to be in control of your own lives and your own futures, right? Well, if you create this agreement now, you decide what happens to your assets in the unlikely event of a divorce. If you don’t, then a man or woman in a black robe will decide based on laws passed by strangers to you. Which would you rather have?”
“Does it have to be long?” she asked, looking unhappy.
“Any agreement lasting decades and involving millions of dollars is going to take up a lot of pages. When you bought a home you signed eighty or ninety pages of documents. For one asset. This is for all your assets and lasts a lot longer. Figure fifteen or twenty pages plus a list of all your assets. Required by law to exchange lists of assets and to have seven days pass between when you receive the final draft and you sign it. And you should but need not have your own legal advice on all this. We can give you names of attorneys.”
“Attorneys, attorneys, attorneys…” he commented ruefully.
I laughed. “Getting married is a legal event. You may be in a church, but the law determines if you are legally married and the rights each of you have…and the obligations. Of course lawyers are involved…”
He leaned forward in his chair. “You see all the failures. You are jaded. We are going to be true to each other forever and build a life together.”
He had a point. I had seen a lot of failures. I thought of Arnold, and made one last try. “You buy insurance for your car not planning to have an accident, but the result without insurance is so catastrophic that it makes sense to pay the premiums to be prepared. That does not mean you are a pessimist. It means you are realistic. That applies here. Two thirds of marriages in this state end in divorce. Think of this prenuptial negotiation as insurance against lawyers taking over your lives later. Hopefully, never needed. Like any other insurance. But you want it in place…just in case.”
“Most people don’t have prenuptials, do they?”
“You are right. And most people don’t have wills either. Or trusts. Equally dangerous to not have those…so, you planning not to have a will or trust?”
That led to a long, long pause. Then she laughed, “OK, you got us. We’ll do it. And the trust, too, I just hate doing this.”
“If you didn’t hate doing it, you wouldn’t be human. Like doing your tax return.”
“Worse,” she breathed.
He was not quite satisfied. “Are you saying that all those without them are fools?”
I considered that. No, Arnold was not a fool. Some people just elect to risk it all. Some smart people are willing to risk it and see what happens.
“No, I am not saying that. I know too many good smart people who elect no prenuptial. I think they are wrong. But in a way I respect them for taking such a risk. My only worry is that they may not fully grasp how disastrous it can be to end up in divorce court at the mercy of attorneys with no prenuptial there to protect you.”
I hesitated, then went on. “I think it comes down not so much to whether you trust your finance’ so much as to whether you think our legal system will do a better job of handling a collapsing marriage’s property than you can determine between yourselves now, while deeply in love. You say you can plan your life together and want to. This is part of that planning, really. The hardest part…but part of it.”
It took them some weeks but they did it. They hated it. But they did it.
Arnold begins every call to me with the words, “Idiot here. I have the following questions to ask…”
But he was not an idiot.
He was in love.