What is a Prenup Agreement?
A prenuptial or prenup agreement is a contract that is entered into before marriage by you and your soon-to-be spouse. In the contract, you and your future spouse disclose all property you own before getting married. You then describe the rights and responsibilities each of you will have during the marriage, as well as how you will divide your property in the event of divorce or the death of one or both of you.
Who Should Get a Prenup Agreement?
Any soon-to-be married couple can enter into a prenup agreement. Every prenup is different. Prenuptial Agreements should be personalized to fit the individual needs of a couple. High net worth individuals and celebrities aren’t the only ones who need prenuptial agreements. A single parent planning on remarrying might want a prenuptial agreement to protect a minor child’s family inheritance or support obligations. Whatever the financial circumstance, a prenuptial agreement lawyer can help draft a prenuptial agreement to protect your assets and simplify property division in the event of a divorce.
What are the Differences Between Marital and Separate Property?
Generally speaking, assets and debts you have prior to your marriage are your separate property/debt. Assets acquired, income earned, or debt taken on during the marriage is marital property/debt. During a divorce, in New York, your separate property or debt will remain your own; and your marital property or debt the Court will divide equitably. Not equally, but equitably. You can read more about equitable distribution here.
Marital Property or Debt
Only marital property is divided in a divorce. New York Equitable Distribution Law defines marital property and debt as all property or debt acquired by both or either spouse during the course of the marriage. Some examples of marital assets in New York include cash, stocks, securities, bank accounts, retirement accounts, 401(k)s, pensions, income earned during the marriage, real estate, jewelry, business interests etc.
Separate Property or Debt:
Separate property or debt is yours exclusively. The court does not have a right to divide separate property between you and your spouse. Separate property or debt is any property or debt that you owned or incurred before the marriage. Separate property is also property you received as a gift or by inheritance or sums you received to compensate you for a personal injury. (Note: Sums you receive in a personal injury case for your lost income is considered marital property. But sums you receive for pain and suffering is separate property.)
Commingle or Mixing Property:
Sometimes, you may commingle your assets or debts. This is when you mix your separate property with marital property. By mixing certain types of property, you risk turning separate property into marital property, which the court could divide between you and your spouse.
Example: Prior to your marriage, you own a securities account. The Court would consider this your separate property. But, during the marriage, you decide to join your securities account with your spouse’s. Upon making the transfer, your securities account may lose its separate property characteristic and morph into marital property to be distributed equitably during a divorce proceeding.
Prenup Considerations
A Prenup is a good time to learn more about the person you are engaged to. During prenup negotiations with your prenuptial agreement lawyer, ask yourself:
Is your fiancé aware of his/her own finances?
How do they treat their finances?
Are they too tight or too lax with money?
Can they negotiate fairly?
Are they attempting to take more than the law allots?
When you tell them your point of view, how do they react? Are they hostile? Are they listening to your concerns and needs? Do they attempt to see your point of view?
On occasion, are they able to put your needs above their own?
If you are asked or will ask for a prenuptial agreement, you should think about the following:
What are your separate properties or debts? Make a thorough list.
What is your and your soon-to-be spouse’s future earnings capacity?
Will you have children? Will you hire a nanny to care for the children? If not, will one of you stay home to care for your children? Will you need special provisions for the stay-at-home parent in your prenuptial agreement?
Are any of your assets at risk of becoming commingled?
How will a prenup agreement protect your assets?
Why You Need a Prenuptial Agreement Lawyer in New York
A prenup is a legally binding contract and will be subject to review by the Court in the event of a divorce. It is best to have a prenuptial agreement lawyer review your agreement and inform you and your spouse of your individual rights and responsibilities. A Manhattan prenup attorney will also inform you of New York State Equitable Distribution law and other relevant state provisions.
Prenup Pros and Cons
Pros:
You and your spouse get to face and negotiate financial matters together.
Family inheritance can be preserved.
The well-being of future children can be established and protected.
Your separate personal and business assets accumulated before the marriage can be protected.
In the event of a divorce, disagreement on most of the terms may be eliminated.
Cons:
Some people believe that wanting a prenup means that you think the relationship will end in divorce.
Forcing conversations about finances before the wedding can be uncomfortable.
Prenups can sometimes fail to disclose all assets that may be subject to New York Equitable Distribution Law in the event of a divorce. It is highly important to hire a prenuptial agreement lawyer for this reason.
Prenup agreements cannot resolve all issues regarding the education, support, and care of future children. Prenups can however address some future child support and custody issues. The Court will refer to the prenup agreement before making the final decision on child custody and support. A prenuptial agreement lawyer will make sure to include or inform you of the provisions that ensure the ‘best interests of the child’ in the event of a divorce, as this is most important to the Court.
Difference Between Prenuptial and Postnuptial Agreement
Prenuptial agreements are signed before the couple gets married. Postnuptial agreements serve the same purpose as a prenuptial agreement, except they are signed after the couple has gotten married. It is never too late to secure your separate and marital property in the event of a divorce. Contact a prenuptial agreement lawyer today.
Can You Nullify a Prenuptial Agreement?
Yes, but it is very difficult because Courts do not like to disturb an agreement made between spouses. A prenuptial agreement lawyer will inform you of the common reasons for nullifying a prenup agreement:
The prenup was signed under duress. If either your or your spouse are forced to sign the prenuptial agreement under duress or coercion, your agreement could be invalidated.
Note: A threat to cancel the wedding if one spouse refused to sign the agreement does not constitute duress. As a matter of law, exercising or threatening to exercise a legal right does not amount to duress.
The prenup is fraudulent. If your spouse purposely fails to disclose their assets or undervalues them or omits to provide important information which would affect the terms of the agreement, then the prenuptial agreement may be deemed invalid.
Note: To establish fraud, there must be evidence adduced that demonstrates that one spouse concealed facts, made misrepresentations or some there was some form of deception.
Example: “We find that Supreme Court’s determinations that the husband knowingly, purposefully and fraudulently induced the wife to sign the agreement and intentionally misrepresented the fair market value of the marital residence are amply supported by the record and, therefore, the prenuptial agreement was appropriately set aside as the product of fraud and/or overreaching” (Carter v Fairchild-Carter, 187 AD3d 1360, 1364 [3d Dept 2020])
The prenup is unconscionable. The Court can choose not to uphold your prenup if the terms are very unfair to either you or your spouse. The Court might also choose to not uphold the agreement if it contains unreasonable provisions.
Will the New York Court Enforce My Prenup?
Yes. Your agreement must be in writing and signed by your future spouse before a notary public in order to be enforced. The prenup doesn’t take effect until you get married.
The laws governing prenuptial agreements in New York are complicated. It is important for you to understand your rights and responsibilities under your prenup before signing it. For this reason, you may want to contact a prenuptial attorney in New York for advice and review of your agreement.
Contact Prenup Agreement Lawyers at Stepanian Law Firm to Protect Your Assets You Owned Before Your Marriage
If you and your future partner are considering a prenuptial agreement, it is important to compare the pros and cons of prenuptial agreements first. It is crucial to have the assistance of an experienced Manhattan prenup attorney. We can provide you with the necessary guidance to find the best option for you. Contact us here or call our prenuptial attorneys in New York at (646) 596-6874 today.