Marriage is a special union where two people declare their wish to be considered as one in both the eyes of society and the law. Prior to making such a significant commitment, however, brides and grooms to be should recognize that their union is also one with the state. Default rules for divorce in New York, for example, are that property acquired during the marriage, are subject to “equitable distribution” which means fair, but not necessarily equal, distribution upon divorce. Through proper planning, couples may contractually agree, either prior to or after marrying, how assets should be divided should they divorce. Critics of prenuptial or postnuptial agreements claim that such agreements whittle the value of marriage down to dollars and cents. Not only is this not necessarily true, but also if you fail to create an economic plan for your marriage, the state will create one for you. Getting a jump start on discussing finances and expectations with your soon-to-be spouse can be a valuable way to manage expectations, clarify goals, and move forward together. I am experienced in what should and should not be placed in prenuptial or postnuptial agreements and how a Court will evaluate the fairness of a prenuptial or postnuptial agreement so that they can be fair and reasonable with one’s soon-to-be spouse.
Marital Agreements & Waivers
What is a prenuptial agreement?
A prenuptial agreement is a contract executed by two spouses in advance of marriage that stipulates how property and finances will be divided at the time of death or divorce. A prenuptial agreement also sets forth the amount and term of any payout will be available to either of the spouses if the marriage dissolves.
What are some of the major rights that one gains when married?
In New York, spouses have the right to inherit from each other, to give each other tax free gifts including property transfers, to collect retirement benefits, social security benefits and to be placed on the other spouse’s health insurance plan. Also, for couples who are thinking of starting a family, there is a presumption of parentage for any child who is born during the marriage, which presumption also extends to same sex couples.
What are the obligations that one takes on when marrying?
There is an obligation to support one’s spouse and, even in the case of no fault divorce which is in effect in New York, a divorcing spouse must receive the permission from the Court to do so.
What are some of the popular items that are negotiated in a prenuptial agreement?
Alimony (maintenance in New York), ownership pf family businesses, how to manage finances once you have children, treatment of the appreciation of separate property during the marriage, modifying the elective share available to a spouse, and sunset clauses that phase out the validity of the prenuptial agreement over time are all popularly negotiated items.
Which items should not be placed in a prenuptial agreement?
Generally, courts will not look into or rule on personal issues in a marriage such as household chores or frequency of sexual relations or infidelity. Also, courts will not validate anything that violates public policy such as clauses that promote divorce, illegal agreements, or issues concerning child support and custody because this is a determination made by the court based on a “best interests of the child” standard only at the time of separation or divorce.
What are the criteria of a valid prenuptial agreement?
To be upheld in New York, a prenuptial agreement must not be unconscionable, must not be fraudulently made when signed (by not disclosing all assets and liabilities) and can not be structured in such a way as to leave either spouse destitute at the time it is signed. The prenuptial agreement must also be signed by both parties and notarized. A prenuptial agreement, if valid in New York, is contractual in nature and difficult to overturn. As a practical matter, both parties to a prenuptial agreement should retain independent counsel and the agreement should be circulated at least thirty days prior to marriage.
What is a postnuptial agreement?
A postnuptial agreement is very similar to a prenuptial agreement but is executed after marriage. In most marriages, financial circumstances, roles and relationships change which sometimes necessitates the use of a postnuptial agreement. Parties may enter a postnuptial agreement if one spouse comes into a large inheritance, they wish to relax the rules of a prior prenuptial agreement due to a successful marriage, or there has been a loss of trust in a relationship due to infidelity by one or both of the spouses.
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