Prenups are becoming more and more common, regardless of the parties’ financial assets or age. More people today prefer to have a plan in case things don’t work out the way they hoped. Young professionals and people entering second marriages especially benefit from comprehensive prenuptial agreements.
Our family law attorneys help clients in New York City and Long Island negotiate, draft, and review prenuptial agreements. We make sure our clients understand the benefits of prenups and tailor their agreements to the type of economic partnership that they and their partner hope to enjoy. We prepare agreements that protect your assets, clarify your intentions and ensure that, if your marriage does not work out, you have a solid plan in place for dissolving the economic partnership.
We have drafted prenup agreements to protect everything from simple real estate investments to more sophisticated and complex assets such as carried interest, stock options, restricted stock units, and cryptocurrency. We are often brought in to protect the legacy of family businesses, real estate portfolios, trusts and partnerships.
What is a prenuptial agreement?
A prenuptial agreement is a written contract that a couple enters into before their marriage. It provides clarity about marital and separate property, and it eliminates ambiguity and discretion which can make things costly and complicated in case of divorce. Prenups can also determine issues like spousal maintenance (called alimony) and ensure that inheritances, family businesses, real estate assets and trusts remain separate.
Why do I need a prenuptial agreement?
Marriage is not only a romantic relationship, it is also an economic partnership. Any assets acquired during the marriage are considered to be marital property. A prenuptial agreement allows the parties to define the scope of their economic partnership, protect premarital assets, and treat assets that would be marital as separate. Overall, it can provide peace of mind that there is a plan in place if things don’t work out.
A premarital agreement can cover several important issues, such as:
Equitable distribution or property division
A prenup can help protect the property that each party brings into the marriage and distinguish separate and marital property such as real estate, retirement assets, investment accounts, stock options, businesses and other forms of property. Prenup agreements can be used to ensure that premarital property is not commingled and that the appropriate separate property credits are never subject to doubt.
Without a prenup, a dispute over whether a property is separate or marital can lead to a contentious court battle. These cases can cost a lot financially and emotionally. A prenup offers a great return on investment by saving future legal fees.
Spousal maintenance (alimony)
A prenuptial agreement can also determine if spousal maintenance (alimony) is waived or how it will be determined. Parties can follow the statutory formula to determine spousal maintenance; they can redefine that formula, or they can waive spousal maintenance completely. Spousal maintenance can generally be waived except in certain circumstances – for example, when the parties have been married for a certain period of time, or when one party gives up their career or works part time to care for the children.
Prenuptial agreements can involve a disparity in wealth or particularly valuable assets that need to be protected. Prenups can protect those assets from any claims by the other party in the event of a divorce.
If one party owns a business or professional practice, a prenup can clarify that the premarital business will remain separate property after the marriage. Valuing a business requires a costly and often intrusive accounting process. Most business owners do not agree with the valuation and do not enjoy the scrutiny this invasive process entails. A prenuptial agreement can help business owners avoid that process in the event of a divorce.
Many prenuptial agreements involve business owners or individuals with an interest in a family business, which must be protected and kept within the family. A prenup offers many options to avoid the valuation and distribution of business entities.
A critical issue involved in prenuptial agreements relates to the appreciation of separate property. A party who comes into the marriage with assets may assume that these assets are insulated from a divorce, but the appreciation of separate property may still be subject to equitable distribution. Appreciation of separate property, including business interests, real estate and other assets like investment accounts, can be better protected by a prenuptial agreement.
When families wish to ensure that family money stays within the family, a prenuptial agreement can be an important estate planning tool for the next generation. Although inheritance is already considered separate property under New York law, a prenuptial agreement can provide additional protections to ensure that estate waivers, such as the waiver of the spousal right of election, are locked in place.
Are prenuptial agreements enforceable?
Prenuptial agreements are presumed to be enforceable like any other contract. We have litigated the enforceability of agreements involving extremely high stakes, and our agreements are drafted in a way that ensures that they are enforceable. Prenuptial agreements must be properly drafted, signed and acknowledged by the parties to be certain they are enforceable now and in the future.
Debts and liabilities
The allocation of debts and liabilities can also be addressed in a prenuptial agreement. We have crafted prenuptial agreements to address both more common credit card debts as well as large student loan debts (for example, for young doctors).
How much does a prenuptial agreement cost?
For simple prenuptial agreements, we typically try to work out a flat-fee arrangement. For more complicated matters, we work on a retainer and bill hourly.
Contact our experienced New York prenuptial agreement attorneys
We can provide clarity about your options, sometimes even in just a brief phone call. We often hear from our prenup clients that their first call with us provided them with a ton of helpful information and peace of mind. Talking about these issues with us will likely make it easier and more comfortable for you to discuss them with your partner.
Prenups are not anti-romantic; they are just useful financial planning tools that will help you and your partner plan for the future and save you a tremendous amount of stress and money. Contact us today to speak with one of our attorneys.