How Can Prenuptial Agreements Benefit Both Parties?
A prenuptial agreement can help both parties:
- Enter the marriage with their eyes open and
- Ensure the expectations of the parties are met if the marriage ends because of divorce or death.
In fact, a well prepared prenuptial agreement can make a marriage stronger
and more durable because it promotes pre-marital communication and agreement regarding financial matters that people often find difficult to discuss.
Do I Need a Prenuptial Agreement?
While a prenuptial agreement can simplify issues in the event of a divorce or the death of a spouse, certain situations make a prenuptial agreement more valuable, such as:
- Either spouse anticipates receiving a sizeable inheritance which may be used to purchase assets during the marriage.
- The parties have a large disparity in income or earning potential.
- A significant disparity in pre-marital net-worth.
- One or both parties have children from a prior relationship.
- A party has elderly parents who are dependent on the spouse for support.
- Either party has a significant amount of premarital debt.
- A spouse wishes to leave an inheritance to people other than his or her spouse and children of the relationship.
Our attorneys have drafted many prenuptial agreements, so we have the expertise and experience to draft an agreement that complies with all aspects of New York law and to ensure that it accurately reflects the wishes of the parties.
Given the potentially enormous financial impact of this type of premarital contract, a person should not sign such a document without the guidance of an experiencd matrimonial lawyer. Additionally, we make every effort to guide our clients through this process being mindful that the parties hope to never need the agreement, and to avoid conflicts throughout the process.
Issues that Prenuptial Agreements Can Address under New York Law
Generally, a prenuptial agreement in New York can establish the parameters for a broad range of financial issues and can help:
- Distinguish that specific assets will be considered separate rather than marital property
- Establish whether spousal maintenance will be awarded and/or the amount or duration of support
- Specify how specific assets shall be distributed in the divorce
- Assign debts to either of the parties or designate debts as joint obligations
- Determine an overall distribution of marital property (and debts)
- Provide support and/or designate property for children of a prior marriage or other individuals
- Indicate responsibility for attorney fees
Litigation to Challenge a Prenuptial Agreement
Although prenuptial agreements are generally enforceable under New York law, you might have a legitimate basis to challenge the contract depending on the facts and circumstances of your situation.
Some of the grounds that might support an effort to set-aside a prenuptial agreement include:
- Failure to Observe Formalities:
Under DRL §236(B)(3), the agreement must be “executed and acknowledged or proven in a manner required to enable a deed to be recorded.” For example, an agreement that is jotted down in summary fashion on a napkin will be open to challenge.
- Insufficient Financial Disclosure:
While the parties to a divorce have a duty of financial disclosure toward each other, failure to disclose every single asset and account will not necessarily mean the court will disregard the parties’ agreement. The best practice to ensure the prenuptial agreement is enforced is for the parties to provide reasonably detailed financial disclosure.
- Independent Representation of the less monied spouse:
Often, the spouse seeking the agreement has greater financial resources. The spouse who is at a financial disadvantage might be able to attack the prenuptial agreement if he or she was not represented by counsel.
The terms and provisions of the prenuptial agreement must be “fair and reasonable at the time of the making of the agreement and … not unconscionable at the time of entry of final judgment.” DRL § 236(B)(6). This is an especially complex area that generates a significant amount of litigation.
A post-nuptial agreement is similar to a pre-nuptial agreement, except that it is executed after marriage, and as such, there are some variations and different issues that need to be considered. Often, couples will use a post-nuptial agreement to address specific issues, such as the purchase of a large asset (a home or vacation home) using funds from combined resources (pre-marital savings, marital savings, family loans/gifts, etc.) so that they can memorialize an agreement as to those funds in the event of a divorce to avoid or minimize potential future disputes. Parties who may be experiencing turmoil in their marriage, but are not prepared to seek a divorce, may also enter into a post-nuptial agreement to try to put aside some of their issues.
We make every effort to understand the needs of each client to draft an effective agreement to meet their needs, and to withstand litigation. We do not use a form or a “cookie cutter” approach. Only by getting to know the needs of each client are we able to best accomplish his/her goal, and we take the time to do that in each case.