More than 70% of divorce attorneys reported that they saw a jump in prenuptial agreements between 2005 and 2010, according to a survey by the American Academy of Matrimonial Lawyers. A prenup is a “legally binding contract that provides for the division of marital assets, spousal support in the event of a divorce and how assets will be bequeathed upon the death of a spouse.”
Without a prenup agreement, if you get divorced in New York, anything you earned or acquired during your marriage is considered fair game. If you are trying to decide whether or not a prenuptial agreement is for you, you most likely have several questions. For answers to common questions, see below:
When might I need a prenuptial agreement?
Many people erroneously believe that “prenups aren’t for young people,” “prenups are bad for women,” or that “prenups mean ‘I don’t love or trust you.’” On the contrary, no matter what your age or economic standing, a prenuptial agreement will allow you to retain control of your assets, liabilities, professional licenses, businesses, homes, gifts and inheritances.
It is especially a good idea to sign a prenuptial agreement if you have assets, such as a home, stock or retirement funds, own all or part of a business, may receive an inheritance, you have children/grandchildren from a previous marriage, one of you is wealthier than the other, one of you will be supporting the other through college or if you have elderly parents or another loved one who needs to be taken care of. High net worth individuals, property or business owners, professionals, investors and persons with children from a former marriage should make it a point to sign a prenuptial agreement before entering into a union.
When is a prenuptial agreement considered valid?
You will have to follow certain rules in order to ensure your prenuptial agreement is valid. It is advised that you:
- Secure separate, independent counsel from your spouse
- That you fully disclose all assets and liabilities
- That you complete the prenup at least 30 days before the wedding
- That you follow all legal formalities: the prenup must be in writing, signed by both parties and acknowledge in the same manner as a deed
- That you do not make the prenup “unconscionable or unreasonable”
When is a prenuptial agreement invalid?
The court will consider a prenuptial agreement invalid if one person shows that:
- The agreement is likely to promote divorce
- The agreement was written/signed with the intention of divorcing
- One party was forced into signing
- The agreement was created unfairly
- One party did not disclose assets fully
What are the benefits of a prenuptial agreement?
A prenuptial agreement is a tried-and-true way to minimize both the financial and emotional toll of divorce. Without a prenuptial agreement, the state will decides which of you gets certain marital assets. In these instances, assets could end up in the hands of your spouse’s children from another marriage. If you don’t want a divorce court to have the final say-so, than filing a prenuptial agreement is a must.
When should I update the prenuptial agreement?
It is a good idea after 10 years of marriage or so, to update the agreement. You may wish to be more generous. You can also add in a “sunset clause” which makes the contract expire at a certain time (for example, after 10 years of marriage).
Does a same sex couple need a prenuptial agreement?
As of July 24, 2011, gay marriage was legalized in New York. Because same sex divorce is a new issue, however, even states that allow gay marriage laws are still being ironed out. As a result, if you do not draft a prenuptial agreement, you could end up in highly disputed divorce litigation. Same sex couples, like any other couples, have assets and interests they will wish to protect in the event of a divorce. Drafting a prenuptial agreement is s sound step to protect the financial health of both partners.
What about online “do it yourself” prenuptial agreements?
While some sites provide you with software and documents whereby you can list your assets, debts and property rights, taking a “do it yourself” approach is not advised. Even though sites like LegalZoom do provide online prenuptial forms, they can leave you wide open to the consequences you are trying to avoid. On the other hand, when you hire a prenuptial agreement attorney, he/she will interview you thoroughly to understand your objectives and draft the prenuptial agreement to serve these objectives. The approach is personalized and never cookie-cutter, but rather modified to meet the needs of each client.
What is a good way to approach the subject of a prenuptial agreement?
The most important thing is to do it as early as possible. If you can talk about it before engagement, that might make it a less touchy subject. Explain why you want the agreement and what your concerns are. Sit down and list out your assets before you secure legal assistance. The important thing is to be completely honest and disclose all of your assets. When a party tries to hide something, a judge can toss out the contract.
What can be agreed to in a prenuptial agreement?
A prenuptial agreement can agree upon a variety of important subjects including but not limited to:
- The rights and obligations of both parties
- Deciding which assets are jointly owned
- The right to buy, sell, use, transfer, lease, mortgage or otherwise manage and control the marital property
- The dissolution of property upon separation, divorce or death
- The modification or elimination of spousal support
- The making of a will, trust or other arrangement to carry out the agreement
- The ownership rights/disposition of the death benefit from a life insurance policy
How long does it take to draft and sign a prenuptial agreement?
It depends on the complexity of your finances and the amount of negotiation necessary for the agreement. By contacting a New York prenuptial agreement attorney and explaining your circumstances, you should have a better idea about how long the process should take. If your wedding is approaching, it is important you get the ball rolling fast!
What is considered separate assets versus marital assets?
If you have some property that was maintained separately while you were married and that was acquired before you were married, this is considered “separate assets.” The increase in value of your separate assets while married can be considered marital assets, however. Even something like a 401(k) can be considered marital property. New York is an equitable distribution state which means that “people get out of marriage, what they put into it.” Sometimes this is difficult, because while a stay-at-home parent did not bring economic wealth into a marriage, they freed up the other parent to work and provided child-care. A prenuptial agreement allows you to alter the definitions of separate/marital assets so that assets are protected in the event your spouse dies or you divorce.