12 Jul Divorce 101 Episode 8: Prenuptial Agreements
Prenuptial Agreements in New York
If you’re engaged to be married, entering into a prenuptial agreement may not be the most romantic preparation you’ll make, but it can be a smart move. A prenuptial agreement can help protect personal and business assets, make expectations clear, and even protect your spouse or children. Keep reading to learn more about prenuptial agreements in New York.
What is a prenuptial agreement?
A prenuptial agreement is a private contract that you and your fiancé enter into prior to marriage. Its purpose is to settle questions of property ownership and the distribution of assets and liabilities in the event of divorce. The agreement can also establish the financial rights and responsibilities of each person in the marriage, such as providing for children from previous relationships. In New York, the prenuptial agreement must be in writing and signed by both parties before a notary public to be valid. It will take effect immediately upon marriage.
What are the benefits of a prenuptial agreement?
Prenuptial agreements offer a range of benefits, including:
- Protection of personal property. You may have property such as family heirlooms, real estate, or a cash inheritance that you want to remain intact and under your ownership and control in the event of a divorce.
- Protection of business assets. Even if you started a business before the marriage, upon divorcing, a court may determine that your spouse is entitled to a certain percentage of these assets–a decision that could endanger your business. A prenuptial agreement can ensure that your business remains separate property.
- Protection from debt. If your soon-to-be spouse is entering the marriage with a great deal of debt, a prenuptial agreement can help ensure that the debt remains the responsibility of your spouse.
- Protecting children from previous relationships. A prenuptial agreement can establish the terms of any child support or identify property meant for children of either party to the agreement.
- Control over the division of assets. If your marriage does end, you and your spouse will have to determine how to divide the assets. If you cannot reach an agreement, a New York court will use its judgment on how the most equitable (fair) way to divide the assets. Rather than letting it fall to the courts or trying to sort out these issues as your marriage is ending, a prenuptial agreement allows you and your fiancé to make these determinations at the outset, giving you more control and potentially making a future divorce easier on both parties.
What are the common factors included in prenuptial agreements?
Prenuptial agreements include almost anything that the couple can foresee as being an issue upon divorce, including establishing:
- whether certain property is separate (belonging to one spouse) or marital (belonging to both)
- how assets or debt should be distributed upon divorce or death
- each spouse’s right to buy, lease, sell, transfer or otherwise control property
- each spouse’s right to alimony, possibly including the amount and duration
- the rights of children of a previous marriage or a former spouse
- investment and retirement strategies
- any other issue the couple agrees upon and that is permissible under New York law