American Greed

Here’s how to bulletproof your prenuptial agreement

Celebrity divorce lawyer Raoul Felder — that is how he describes himself — has been involved in some of the most famous, most acrimonious divorce cases in history.

He handled former New York Mayor Rudolph Giuliani's two divorces, went up against Elizabeth Taylor's very experienced lawyers when he represented her seventh and last husband, Larry Fortensky, and represented thousands of other clients who were not famous at all. He says his career would have been much different if more couples had worked out prenuptial agreements.

"Oh, if we had prenups over the last 40 years that I've practiced, it'd probably cut out two-thirds of my cases," he said.

While they were once the province of the richest, most famous couples, people from all walks of life now use prenuptial agreements, which specify how couples will divide their assets if they split. Felder says his office now handles as many prenups a year as divorce cases.

"It's become a part of every divorce lawyer's practice now because, if you don't have a prenuptial, see a psychiatrist, not a lawyer," he said.

One couple that could have used that advice is Mike and Dalia Dippolito. Their story is featured on the next episode of CNBC's "American Greed." Dalia was so determined to get her hands on Mike's money that she took out a contract for his murder, not knowing that the hit man was an undercover police officer. Her sensational case transfixed South Florida — and the nation — through not one, not two, but three televised trials. But the whole thing might not have happened had the couple reached an understanding about their assets in advance.

Not all prenuptial agreements are created equal, however. A poorly conceived contract might not hold up in court if challenged, making a divorce even more difficult than it already is. Felder offers some tips on how to make your prenuptial agreement bulletproof.

Act fast, but act

As unromantic as a prenuptial agreement may seem, Felder says it should be one of the first tasks a couple completes after they get engaged. That way, if the marriage fails — as roughly one-third of marriages do — it will be much more difficult for a spouse to claim he or she was coerced into signing the agreement.

"I like to say that once the hall has been hired, the invitations go out, and the contract's been signed for the band, it's too late to have a prenuptial free of duress," he said. "A wife certainly could say, 'Listen, I invited all these people, I brought these people from all across America, I'd be humiliated, so I would have signed a laundry ticket if you'd given it to me.'"

Felder says the strongest prenups are written at least six months before the wedding. But do not skip the prenup just because you waited too long.

"I've drawn prenups that I knew would hold up right the day they're getting married," he said. "I've had people stop to ask for a quick prenup when they were going to get married down at City Hall."

Some couples even sign post-nuptial agreements after they are married. The important thing is to have a plan that the two of you agree to should the bloom come off the rose.

And do not shy away just because you think your finances are not complicated enough to warrant the cost. A basic agreement can be done for as little as $500, Felder says.

Honesty is the best policy

You want to start your marriage off on the right note, with no secrets from one another. That applies to the prenuptial agreement as well.

"If you want to make sure that a prenup sticks, the guide is transparency. People should state what they have, what they may have, what's down the pike, if they know," Felder said.

Just as in the marriage, what starts out as a harmless little white lie can turn into something much bigger and messier.

"A man wants to impress the woman he's marrying. He says I have $1 million in this company. It's worth $40. Similarly, a woman may want the husband to feel that she's not impecunious so she'll puff up her wealth and, of course, when the divorce comes it makes a lot of problems," he said.

On the flipside, Felder says, don't try to hide assets from your future spouse. If they turn up later in a divorce, you could lose far more than you initially tried to hide.

Even if you do not intend to leave assets out of your prenup, make certain you are not forgetting anything.

"People inadvertently overlook lots of things. They inadvertently overlook the value of insurance policies, old bank accounts, what a house may be worth," Felder said.

Basic elements

While a well-executed prenup can save a couple from financial and emotional heartache, the agreements do have their limits.

A prenup is meant to govern how assets such as money, valuables and homes will be divided after the marriage. It cannot dictate other potentially contentious aspects of a divorce, like child custody.

"No matter what you write in there, a child is a ward of the courts and the judge is going to protect that child, period," he said.

Felder warns that other commonly requested provisions are unlikely to hold up in court.

"I will be the house-husband, I will take out the wash. You will do the laundry. I will make the beds. None of this is enforceable in courts — they don't — but it makes people feel better, so the lawyers draw it."

While there is no law requiring you and your spouse to have separate attorneys, Felder recommends it.

"You can't have two masters. You'll love one and hate the other," he said. "The problem with one is that each one is going to say 'I thought that lawyer was protecting me,' and you can't be protecting both of them."

But that does not mean the process has to be contentious.

"You have to be careful when going to a lawyer for a prenup that the lawyer is not like a ferocious bulldog," he said. "I've had these cases where drafting the prenup makes the parties divorce before they get married. It becomes so antagonistic."

Of course, for the Dippolitos, that probably would have been a much better — if less sensational — outcome.

See the outrageous, real-life, made-for-TV tale of Dalia Dippolito on the next all-new episode of "American Greed," Monday, March 12, at 10 p.m. ET/PT only on CNBC.