What is a Prenuptial Agreement?
A prenuptial agreement, or prenup, is simply a legal contract between two people who are planning to marry (or a co-habitation agreement in the event of a domestic partnership). It determines who owns what, who gets what, and how you choose to manage assets and finances during your marriage, or in the event of death or divorce.
With a prenuptial agreement, you and your partner are in charge of defining these terms. If you don’t make these choices, the governing laws of New York will make these choices for you.
Who Needs a Prenuptial Agreement?
YOU need a prenuptial agreement.
No matter your net worth, income status, or life stage, a prenuptial agreement in New York can help you and your partner clearly and concisely agree to a financial roadmap for your marriage and understand what happens in the event of divorce or death.
If you’re a millennial and getting married for the first time, you may be well on your way to building your career. Perhaps you’ve already bought a home or started an investment portfolio. You or your partner could be carrying student loan debts. Or you may be expecting an inheritance or significant gift later in life. Planning for future scenarios can make a difference and give you peace of mind.
Or have you already been through a painful divorce and found your financial future compromised? Do you have children from another relationship and need to make sure they are taken care of? Is there significant income or wealth disparity between you and your partner? Are you a business owner? Is your partner a freelancer? Is one partner planning to stay home with children? Did either of you observe your parents (or other family member or friends) go through a divorce and see how the lack of a prenuptial agreement resulted in increased conflict and hostility?
You and your partner have the opportunity to take charge of decisions about your financial future and the hopes, dreams, and aspirations that will lead you there.
What’s in a Prenuptial Agreement?
Remember, a prenuptial agreement essentially determines who owns what, who gets what, and how you manage your assets and finances.
Here are some specific examples:
- Separate Property Assets: Define separate property assets that exist prior to marriage or are assets that are gifted to one of you and how this status will be maintained within the marriage.
- Business Ownership: Establish how a business owned by one partner will be managed throughout the marriage and specifics rights, if any, of the other partner.
- Maintenance or Spousal Support: Determine what support a spouse receives during the marriage or after divorce or separation.
- Children from a Prior Marriage: Provide a clause for the distribution of assets to children from a prior marriage (that might otherwise be superseded by the governing laws for wills and estates in your state).
- Liability of Debt: Eliminate any liability one partner may have over debt accrued by the other partner prior to marriage.
- Inheritance: Pre-determine how an inheritance received by one partner is classified.
- Confidentiality: Incorporate a confidentiality clause so both partners have a level of discretion and privacy in the event of a divorce or separation action.
What’s Not in a Prenuptial Agreement?
A prenuptial agreement in New York does not determine child custody or child support decisions (whether you already have kids or will have children during the marriage). New York courts seek to resolve these issues through the lens of what is “in the best interest” of the child(ren) at the time of the divorce.
A prenuptial agreement can’t enforce terms that are against public policy. Nor can a prenuptial agreement be so lopsided in a party’s favor that it is deemed unconscionable.
And despite the occasional magazine article about it, a prenuptial agreement can’t effectively direct who’s doing the laundry, who your friends are, or how often you will have dinner with the in-laws, though it can provide some guidance. It’s a tool to put you at ease for planned and unplanned financial events.
Sample New York Prenuptial Agreement
This is a sample of a Prenuptial Agreement from the New York State Bar Association. It can give you a preliminary idea of what the actual agreement might include. Of course, your prenuptial agreement will be specific to your circumstances.
When Should We Get a Prenuptial Agreement?
If you and your partner have decided to marry, now is a good time to start talking about a prenuptial agreement. This is not a topic for the eve of your wedding. Begin this conversation one month before, six months before, or even a year before your wedding.
If your wedding date is quickly approaching, there may still be options for how to best to proceed with a prenuptial agreement or to explore the possibility of a post-nuptial agreement (which is basically a prenuptial agreement, except done after the wedding or later during the marriage).
Will My Prenuptial Agreement be Upheld by New York Courts?
The answer is, in New York, most definitely! If the legal and technical requirements have been observed and the terms are not unconscionable and there has been no fraud or duress, it’s a very good bet that your agreement will be upheld.
Take Action
A prenuptial agreement is one of the first important life decisions you will make with your soon-to-be spouse and while discussions about money and finances are not easy they are particularly difficult if you are experiencing anxiety and stress in your marriage. It’s better to get it out of the way when you and your soon-to-be-spouse are both thinking clearly and without anger or excess emotion.
Planning your life together is a time of great joy, excitement, and anticipation. So, if you’re planning a life together, why not plan your financial life together, too?
Get in Touch
When life gives you lemons, a prenuptial agreement can be your lemonade.
I’d be happy to discuss your situation with you. Whether you are still exploring the idea or already know that you want to move forward with a prenuptial agreement, get in touch with me.
If you are considering a prenuptial agreement or post-nuptial agreement in New York, or have another New York family law matter, contact us today to schedule a consultation.