There are a lot of things to consider when getting married and many issues to iron out and come to an agreement on. It isn’t just a romantic union, it’s also a financial partnership with assets, children, and other important concerns. Some couples find that the best way to handle these issues is with a prenuptial or postnuptial agreement.
These agreements have long been considered by many to be a tool of the wealthy and wielded to protect one or both spouses’ assets. However, they are much more than that. These agreements actually cover many common issues that occur within marriage and can be beneficial in keeping both parties to the marriage feeling secure and protected.
Understanding Prenuptial Agreements
Prenuptial agreements are largely misunderstood and that has led to a lot of negative perceptions. In fact, these agreements can be quite useful and beneficial for both parties in the marriage.
- What is a prenuptial agreement? A prenuptial agreement, or “prenup, “ is a legally binding contract that is between two people who are entering into marriage. This contract addresses and settles many of the financial and property division issues as well as spousal support and other situations that may arise within the marriage if one of the spouses dies or the couple chooses to get a divorce.
The key feature of a prenuptial agreement is that it is made before the wedding takes place. It goes into effect as soon as the couple is married.
- What are the reasons for a prenuptial agreement? Prenups are very flexible and can be tailored to suit any couple’s unique needs. If one of the spouses is wealthy, they may choose to create an agreement that will preserve all or a portion of their wealth. Likewise, a spouse who is coming into the marriage with a child from another relationship may opt to create an agreement that will protect the child’s personal savings or inheritance.
A prenup can also be written to protect one or both of the spouses’ assets like houses, businesses, investments, and property. It can also make the division of property in a divorce much easier.
Without a prenuptial agreement, the division of the property in the event of death or divorce is left to the discretion of the courts.
- What are the requirements for a prenuptial agreement? A prenuptial agreement must be in writing and both people who are getting married to each other must sign before a notary public. If the agreement is not signed or if the couple tries to present an oral prenuptial, the court will not accept it.
Understanding Postnuptial Agreements
Many people are not even aware that postnuptial agreements even exist, but they have been around for quite some time. They operate much like a prenuptial agreement, but with a few key differences.
- What is a postnuptial agreement? Much like a prenuptial agreement, a postnuptial agreement is a contract that a couple enters into so they can address certain matters within their marriage such as debt, property, and finances. The difference is, when the couple enters into the agreement, they are already married.
- What are the reasons for a postnuptial agreement? There are many reasons that a couple may enter into a postnuptial agreement. They may do it to minimize the occurrence of financial conflicts within the marriage. If the marriage is in trouble, they may create an agreement to address property ownership, division of debt, and joint wealth, especially if the financial circumstances have changed.
They can also create a guide for asset separation such as real estate, investments, or businesses. They can also unite marital assets. If one of the spouses opens a business, a postnup can protect the business partners and the business.
If the couple has children during the marriage and one spouse gives up their career and salary to stay home and care for the children, a postnup will make sure that the spouse’s needs are met and they are taken care of.
- What are the requirements for a postnuptial agreement? A couple entering into a postnuptial agreement must be transparent in disclosing their debts and assets. Further, the agreement must be in writing and signed by both parties before a notary public.
- What can be covered in a postnuptial agreement? Postnups are widely varied from couple to couple. Typically, though, the agreements include decisions about defining marital property, maintenance, and alimony expectations, clarification of debt incurred before the marriage, assets for both spouses, plans for payments in the event of a divorce such as legal fees for the other spouse, and other issues.
Are Prenuptial and Postnuptial Agreements Enforceable in New York?
Prenuptial and postnuptial agreements will stand up in court if they are compliant with New York State law:
- The agreement is in writing
- The agreement is signed by both spouses
- The agreement is signed before a notary public
- Both spouses provide full disclosure of their debts and assets
What Cannot be Included in a Prenuptial or Postnuptial Agreement?
There are some things that a prenup or postnup cannot or does not cover. Enforceable terms for child custody or support are the big ones. The reason for this is that these issues are decided in court in the best interest of the children. That is something that must be decided at the moment by looking at the current circumstances. Both parents must be examined where they are at that moment as well as the children. It is not possible to address that type of issue in a document that may be enforced a day, a year, or ten years in the future, so the court will not honor terms of this type.
How is Property Distributed in a Divorce if there is no Prenuptial or Postnuptial Agreement?
If there is no prenup or postnup or other agreement and the parties are not able to agree on how the marital property is distributed when they divorce, the decision falls to the judge’s discretion. Under New York law, the property is divided by “equitable distribution.” This does not mean it is divided 50-50.
The judge bases his or her decision according to several factors that include the age of each spouse, their individual incomes, the health of each spouse, and more.
When is a Prenuptial or Postnuptial Agreement a Red Flag?
A prenuptial or postnuptial agreement should be drawn up in a caring, thoughtful, and fair manner. Both parties should agree on all the terms and be transparent in their disclosure of vital information.
However, there are times when a prenuptial or postnuptial agreement can be construed as a red flag.
- If the terms of the agreement are not fair and equitable
- If spouses are not transparent in their disclosure of debt and assets
- If it seems that one spouse is withholding vital information from the other
- If one spouse tries to discourage the other from getting their own attorney to represent them in signing the agreement
- If one partner tries to coerce, threaten, force, or manipulate the other partner into signing
- If one spouse refuses to address an issue that the other spouse feels is very important
- In one spouse has any concerns or reservations about signing the agreement
Any red flags or reservations about entering into a prenup or postnup should be addressed before the agreement is signed. This may mean talking with an attorney or marriage counseling.
Should Both Spouses Get an Attorney for a Prenuptial Or Postnuptial Agreement?
The New York City Bar advises that the spouses entering into a prenup or postnup should get separate attorneys. The reason for this is if each spouse does not have his or her own attorney the court will put the agreement under a microscope, looking for unfairness. This may lead to judges refusing to enforce such agreements.
If you are considering a prenuptial agreement or postnuptial agreement, don’t sign one until you talk to an experienced, knowledgeable family law attorney. No matter how amicable your situation seems, it is always best to let your lawyer review the agreement and make sure that your rights and best interests are protected.
Call the Litvak Law Firm today at 718-989-2908 and let us help create a prenup or postnup that is the most beneficial for your situation.