Couples anticipating marriage often view a prenuptial agreement as an infringement on their love and trust for one another. However, it’s worth considering that marriage is more than just a romantic relationship; it is also a legal and economic partnership. Not just that, but statistics bear out that around half of all marriages in the United States end in divorce. And second marriages, which have a higher divorce rate, also often come with significant acquired assets and children. With those considerations in mind, it begins to make sense why couples should consider signing a prenup in New York before getting married.
The Basics of a Prenuptial Agreement in New York
A prenuptial agreement, or prenup, is a legal document between two future spouses entered into prior to getting married. When you prepare a prenuptial agreement with a family law attorney, the parties are defining three main areas:
- Disclosure of financial assets, including money and property owned by each future spouse, showing which assets will be counted as separate property and which will be considered marital property.
- Rights and responsibilities of each partner during the marriage, including how bills will be paid, working conditions for employment or business operations, household maintenance, and potentially childcare.
- Division of assets and debts in the event of a divorce, as well as the responsibilities of each partner when it comes to spousal and child support.
One thing the prenup cannot do is determine a binding custodial arrangement. While wishes can be reflected in the agreement, custody remains the domain of the courts if the parties cannot agree.
Under New York law, property should be divided “equitably” following a divorce. However, if you choose to create a prenuptial agreement, the courts will be required to honor the stipulations of that contract in lieu of any statutory mandate for the division of assets following the end of a marriage, provided that the agreement was valid at the time it was entered into.
If you and your spouse decide that you should have signed a prenup but did not do so before getting married, it’s not too late to protect yourselves. You may still create and sign a postnuptial agreement, which is essentially the same document, but one entered into after the marriage. It might seem unromantic and cynical to define what should happen in the event of a separation or divorce while your relationship is still going well or just getting started. But considering that divorces without a prenup often become very messy and prolonged, it’s worth defining these parameters at the outset, especially if you and/or your spouse possess significant assets or there is likely to be a child custody dispute or disagreement over future spousal support.
What Does a Prenuptial Agreement Cover?
In theory, a prenup may cover an almost unlimited range of subject areas. But there are a few specific areas that the majority of prenuptial agreements address. Here is a list of the most common items found in prenups:
- Individual property, assets, and debts of each partner
- Joint assets to be considered marital property
- Spousal support or waivers of same
- Marital responsibilities, such as bill paying, household maintenance, childcare, etc.
- Employment or business responsibilities
- Family property or businesses of each spouse to be included or excluded from marital assets
- Inheritance rights of each spouse and/or their children
- Division of property and debts in the event of a divorce
- Confidentiality agreements regarding any sensitive personal or business information
You are free to get as specific as you like in regard to assets, rights, and responsibilities when drafting a prenup in New York, but it’s important to keep the agreement equitable and fair between you and your spouse. In order to be a valid New York prenuptial agreement, the document must be in writing, signed by both spouses, and duly witnessed by a notary public pursuant to specific notary requirements. It must also be entered into willingly and not under duress or any other extenuating circumstances, including mental incompetence, a spouse under the age of 18, or potential fraud. A prenup may also be invalidated if there was a failure to fully disclose the assets and debts of the parties before signing.
Benefits of Having a Prenuptial Agreement
Besides the obvious benefits of clarity and security regarding marital property, rights, and responsibilities, some individuals may benefit more from a prenup than others. For example, you may be remarrying, and your fiancé may have financial obligations such as alimony or child support from a previous marriage. A prenup can help protect your assets and income from sharing in the burden of those obligations.
You or your spouse may also have a large amount of debt, or one of you may be significantly wealthier than the other. By signing a prenup, the parries can be protected from having to be responsible for each other’s debt or premarital assets from being distributed in a divorce due to an increase in value or comingling of assets.
New York is an Equitable Distribution State
The state of New York is in the minority of states that have not adopted the Uniform Prenuptial Agreement Act (UPAA), legislation governing premarital agreements between marrying couples that was created to promote uniformity and predictability. Also, the parties can elect for the agreement to be interpreted solely by New York law. This is a benefit, especially as couples move between different states, to help ensure that prenuptial agreements entered into in New York will be fully honored and enforceable in another.
Our highly experienced team of family law attorneys at Tully Rinckey is here to answer any questions you might have and provide legal advice about drafting or enforcing a prenup in New York. Schedule a consultation or get in touch today to find out how we can help!