What is a Prenuptial Agreement?
A prenuptial agreement is a contract between two people that is executed in contemplation of and to be effective upon marriage. In most modern prenuptial agreements, there are wedding bells, money bells and cash registers ringing. Couples who are thinking about getting married or are already engaged should bookmark this page and read on to learn more about the purpose of a prenuptial agreement.
A prenuptial agreement is a contract entered in to by a couple that either contemplates marriage or already married and is effective upon marriage. In New York, prenuptial agreements must be in writing and signed by both parties. Prenuptial agreements include a variety of topics that are intended to be binding on each spouse after the marriage. Although the areas that can be addressed are vast, the most common topics include: How much support will be paid during times of separation or divorce? What assets belong to each spouse? What are the financial obligations of each spouse? The parties can also contract with regard to provisions for children.
In New York , a prenuptial agreement made prior to marriage creates a contract that remains in effect even after the marriage ends. Any provision of a prenuptial agreement that may pertain to child custody and support will not be binding on the court. A prenuptial agreement signed by both parties controls over New York law and should be written in plain language so that each party fully understands what is being proposed.
Prenuptial agreements are used by couples who wish to address matters so that each person understands his or her rights and obligations during the marriage or upon its termination. Many people want to avoid the expense of a long and expensive court battle concerning property and other rights. Some couples use a prenuptial agreement to protect the inheritance of children from a prior marriage estimated to be approximately 50% of all prenuptial agreements. Others may use it to shield the business he or she owned prior to entering in to the agreement.
Requirements for a Valid Prenuptial Agreement
Each of the following requirements must be satisfied for a prenuptial agreement to be valid in New York: The prenuptial agreement must be in writing and signed by both parties. If the agreement is unenforceable due to the failure to satisfy the above requirements, it is rendered void as if never having been made, however the parties are not precluded from reinstating the agreement with the compliance of all the requirements. Each party is entitled to a copy of the agreement upon request. The rights and obligations of parties created by a prenuptial agreement may not be adversely affected by conduct of a party after the execution of the agreement and the court may consider the provision unconscionable if the foregoing occurs. The agreement may be revoked by mutual consent impliedly or by a subsequent valid agreement. The agreement will not be deemed to be enforceable if the court finds that full financial disclosure was not provided to the other party prior to execution of the agreement or that the agreement was unconscionable at the time of its inception. The agreement will be considered unconscionable "if, in the light of the overall circumstances when made, it was manifestly unfair or unduly favorable to one spouse generally. One party may waive provisions of the agreement to the extent that such waiver is in writing and signed with a notarized signature. At the time that a waiver is made, the revocation must be made in writing and subscribed by the parties.
Advantages of a Prenuptial Agreement
Prenuptial agreements offer a wide array of benefits that can provide both financial and marital security. When done correctly, a prenuptial agreement will state who will retain property during the marriage, what property will be considered marital property, how debt will be allocated, how alimony will be handled, and how any pre-conceived expectations about finances during the marriage can either be enforced or prevented. In short, prenups protect you from a variety of marital misunderstandings, and can give you significant control over your post-divorce future. The following are some of the more common (and unusual) reasons that you should consider signing a prenuptial agreement before you get married:
Protection From Debt
Debt, much like divorce, is a cold hard fact of life. But no one should go into marriage assuming their spouse’s debt will be neglected or ignored. A prenup can protect you from your spouse’s student loans, credit card bills, and more.
Protection Against Creditors
A marital situation can create a lot of complicated variables related to liability and asset distribution. If one partner has business debt, it’s possible for creditors to go after both partners’ assets. A prenup can prevent this.
Protection of Family Property
If you want to ensure that a family heirloom, legacy business, or other property stays within your family, even if you have children, then a prenup can help.
Pre-Determination of Alimony
Similarly, a prenup can help you pre-determine alimony payments, which can easily spiral out of control if left uncontrolled.
Creation of a Schedule of Frequent Flier Program and Health Club Membership Benefits
It’s not totally uncommon for one spouse to have frequent flyer program accounts for several different airlines, and enjoy the benefits of airline perks. A prenup can state which spouse retains ownership over these accounts should they get divorced.
Serialization of Classes of Marital Property
It’s not completely uncommon for couples to go into marriage with significant amounts of personal property acquired prior to the marriage. A prenup can pre-determine actions taken in this area, such as identifying class X, class Y, and so forth as separate from marital property.
Typical Terms in a New York Prenuptial Agreement
Prenuptial agreements can be very basic or very specific and detailed. They can be short and simple, or lengthy and complex—that all depends on the couple and their individual needs. It’s important to know what you’re getting into, however, before signing on that dotted line.
While there are many things that you might want to consider including in a prenuptial agreement, there are at least 10 common clauses typically mentioned and usually agreed upon. They include:
- Waiver of Rights to Spousal Support
- Division of Assets Acquired Before and During the Marriage
- Property Settlement Upon a Separation
- Division of Marital Residence or Payment of the Marital Residence
- Mutual Releases
- Death and Inheritance
- Separation: Release of All Claims
- alimony or Spousal Support Agreement
- Provisions for Children from Previous Marriages
- Other Provisions
All of these provisions are spelled out in detail in a typical prenuptial agreement, so it’s important for you to confer with an experienced New York family law attorney to determine what you want and what is in your best interest. The attorney will explain the law and make recommendations on how to proceed.
Here’s an example of some of the language that might be found in a prenuptial agreement concerning the division of marital property:
- (1) Defendant shall not have recourse to Plaintiff for alimony and/or support of any kind or description.
- (2) Plaintiff shall not have recourse to Defendant for alimony and/or support of any kind or description.
- (3) The marital residence located at [address] will be retained as the marital residence and is the sole property of the Plaintiff/Defendant free of any claim by the Defendant/Plaintiff.
- (4) Each party shall have the right to collect rent from any tenant(s) of the premises.
- (5) If either party has an existing mortgage on the marital residence, each party agrees to be responsible for half of the payment of the principal, interest, taxes and insurance on the loan monthly. The parties agree to maintain the home in substantially the same condition as maintained at present.
- (6) Neither party shall remove fixtures or furniture without the written consent of both parties.
- (7) At the sale of the premises, the net profit shall be divided equally between the Plaintiff and the Defendant.
The language will vary according to both parties involved, the level of education they possess and the negotiations that precede the agreement. The clearer and more concise the agreement, the less likely anyone will feel cheated or taken advantage of because the basic elements are clearly spelled out.
How to Create a Prenuptial Agreement in New York
Determining how to draft a prenuptial agreement in New York requires advance planning. The State of New York mandates that prenuptial or premarital agreements be made with certain formalities and within certain time periods prior to a marriage.
In order for a prenuptial agreement to be valid under New York Law, it must:
Both parties should consult with an attorney regarding the particulars of any agreement as soon as possible. It is highly recommended that no agreement be made within six months of a marriage.
In New York , prenuptial agreements cannot be entered into if an attorney does not review the contract for both parties (REVISED CFR 20.4(E) and a NOTARY public must also execute signature.)
Both parties must disclose their assets to each other so that each party knows what he or she is worth.
The premarital agreement cannot take away maintenance or support.
Extrinsic guarantees that the prenuptial agreement will be adhered to are enforcement provisions that can be written into a prenuptial agreement by the lawyer drafting the agreement.
Common Issues and Solutions
Creating a prenuptial agreement in New York rarely occurs without some challenges. Getting each party to sign the necessary documents is not always an easy proposition. People come to lawyers with a mangled proposal that often asks for outlandish limitations on the receipt of child support. Another will admit to having loved someone else for the last 18 months, but still plans to marry. Another has engaged in a trans-continental romance and wants out. Chopping out the emotional detritus requires both sensitivity and frankness. Finding a common denominator between those who are wanting something is another challenge. When one party begins with an emotional disadvantage because they lack the resources to afford a lawyer, things can become ugly. The person who has the financial resources often makes ridiculing remarks about the other party’s emotions and lack of sophistication. Regarding issues over terms, the parties do not necessarily comprehend what will happen in the future, or what it could cost them to enforce terms of the agreement. Exaggerated emotional reactions lack a center, and often fuel a destructive drive that will ignore the common sense legal rules. In the end, fear eats the soul, as the saying goes. That leaves the price of an agreement double the result one would expect if people undertook to think through their lives and ask what would be fair and equitable, and just.
Prenuptial Agreement Samples and PDF
When drafting a prenuptial agreement, you may be interested in using a template. You can find a number of them online, but we advise that you consult an attorney with experience drafting these documents. To that end, we have provided a number of prenuptial agreement templates and PDFs below that you may find useful .
Remember that you need to alter the terms of the prenuptial agreement based on your unique circumstance. The law does not permit the terms of a prenuptial agreement to remain the same across parties, this would render the prenuptial agreement useless given that it was not specifically tailored to your situation.