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Financial Planning

Britney Spears Kevin with a Prenup

What you (and Paul McCartney) can learn from the pop star's pre-marriage planning.

He's a world renowned musician with a billion-plus bucks and a failed marriage. She's a blond pop singer with a flagging career and a failed marriage.

Guess what? The blond was the smart one. Before Britney Spears married soon-to-be-ex Kevin Federline, she had her lawyers draw up a prenuptial agreement that reportedly awards him only $300,000 of her estimated $100 million in assets. Paul McCartney didn't take that precaution and now faces an ugly court battle and a mega-million-dollar payout to his second wife, Heather Mills McCartney.

Take note: Prenups aren't only for the rich and famous. A premarital contract not only helps you divvy up property in case of divorce but can also absolve you of your spouse's debts, carve out assets for children from a previous marriage, keep a family business intact and ensure that the family home remains in the family. "A prenup preserves the expectations of the parties," says Robert Nachshin, a lawyer who wrote I Do, You Do ... But Just Sign Here (Nachshin & Weston, $15).

You'll need a lawyer to draft the document. A prenup can cost from a few thousand dollars to as much as $25,000. Most lawyers charge an hourly rate of $200 to $700.

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Bring up the issue early. Uncomfortable as the idea may seem, discussing a prenup early on can deepen, or at least clarify, a relationship, says Katherine Stoner, coauthor of Prenuptial Agreements (Nolo, $35). At best, the conversation gives you a better picture of each other's circumstances and goals; at the very least, it tips you off to potential deal breakers. "Some couples conclude they have such different expectations about property that they rethink the decision to marry," says Stoner. "I think that's a good thing."

Work out the details at least three months before the wedding, and sign the document well in advance to avoid the appearance of duress. Courts often look askance at prenups signed within a week or so of the big day.

Take inventory. Each of you should list all your assets, including their fair market value, along with debts, income and expenses. You don't have to cite every last pillowcase and place mat (such items can be lumped together as "household goods"), but take care to specify the disposition of sentiment-laden items, especially if you have children from a previous marriage. "Kids can get hung up on almost anything," says Stoner. "You have to be very clear." If you share ownership of a second home or a business, include your percentage and its proportional value; an accountant or real estate agent can help.

Look ahead. Most prenups provide that whatever property -- or debts -- you bring to the marriage will remain yours if the marriage dissolves. And they protect what you don't have -- say, property you expect to inherit or the riches that you believe will derive from your songwriting skills. Planning a career as a successful doctor? A prenup can compensate your spouse for putting you through med school or include a formula that divvies up your practice. A prenup also lets each of you waive certain rights, including your right to inherit your spouse's property. Couples often use such a clause to preserve their estate for children from a previous marriage.

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Know the rules. You can stipulate a limit on how much weight your spouse may gain (although you may have trouble enforcing it) or who gets custody of the puppy. But no state will allow you to waive child support, dictate child custody or otherwise impinge on the rights of your children. Some states prohibit you from waiving alimony, and some decline to enforce provisions that award financial compensation to a spouse whose partner has strayed. States also question the legitimacy of a document that gives one partner a financial incentive for divorcing the other.

To avoid having a judge invalidate the prenup because one part of it is unenforceable, include a so-called severability clause, which protects the basic contract regardless of challenges. As Nachshin puts it: "If one provision is stricken, the rest is still valid."

Play fair. Laws aside, courts in most states will not enforce a prenuptial agreement that is patently unfair, either in its terms or in the way it was negotiated. "The more one-sided it is, the more unpleasant the taste it leaves in your mouth," says Stoner. For instance, a judge might disallow a prenuptial provision that leaves one partner destitute and the other with the bulk of the fortune. You're also on shaky ground if it appears the agreement was rushed or if only one side was represented by a lawyer.

In fact, the best strategy for avoiding disputes -- which is the whole point of a prenup -- is for each person to hire his or her own lawyer. After that, says Nachshin, you and your beloved can "let the lawyers negotiate while you focus on the fun."