If you are entering into your second marriage, it is particularly important that you and your spouse-to-be strongly consider executing a well-drafted prenuptial agreement. Maybe your divorce from your prior spouse was amicable or maybe it was heavily litigated. In either scenario, you have been down the road of divorce before and you know how important it is to protect yourself and your assets. The prenuptial agreement process is a cost-effective way to resolve the issues of a possible divorce so that you can avoid spending years litigating.
For any marriage, a prenuptial agreement is a crucial and often necessary component of protecting your financial future. However, it is likely that your second marriage will be more complex than your first one. There are several additional and important considerations that arise in connection with a second marriage that make a prenuptial agreement exceedingly valuable.
Importantly, aside from detailing the terms of a possible divorce, a prenuptial agreement can detail your financial practice during the marriage and how your expenses will be paid. If you or your fiancé have children from a prior marriage, there are several additional considerations to be aware of. Are either of you paying child support to a spouse from a prior marriage? If so, will this support be paid from marital money or from separate property? Are you or your fiancé responsible for the college expenses of a child from a prior marriage? Are either of you obligated to pay spousal maintenance to a former spouse? In a prenuptial agreement, you can detail a fair understanding as to how these expenses will be paid, based on what works for you and your fiancé.
A prenuptial agreement can also provide for the distribution of assets upon your death. Under New York law, a surviving spouse is entitled to receive an elective share of their deceased spouse’s estate. The surviving spouse is entitled to $50,000 or one-third of the deceased spouse’s estate – whichever is greater. Do you want your new spouse to receive this share or do you want your entire estate to pass to your children upon your death? Perhaps you want to customize a certain share of your estate or specific dollar amount to pass to your spouse, with your children receiving the rest. Would you prefer to leave your entire estate to your spouse upon your death, but ensure that upon your spouse’s death, the remainder of your estate passes to your children? You can detail these specific terms in your prenuptial agreement.
Even if you or your fiancé do not have children from a prior marriage, a prenuptial agreement should be strongly considered in a second marriage. As you walk down the aisle for the second time, it is likely that you have accumulated assets throughout the years. If you own a house, there are several issues to consider. If there is a mortgage on your pre-marital residence, what funds will you use to make your monthly payment? If you renovate or improve the residence during your marriage, and it increases in value, upon a divorce (without a prenuptial agreement), your spouse could seek a portion of the appreciation. This area is one of the most heavily litigated areas in matrimonial law. Maybe you plan to use pre-marital assets to purchase a residence with your fiancé. A prenuptial agreement can ensure that you would receive a credit for any separate property funds that you contribute towards the purchase of the home. Similarly, if you own a business, a prenuptial agreement can “divorce-proof” your business and ensure that your years of hard work are protected and that you do not have to engage in a lengthy valuation process in the event of a divorce. Absent a prenuptial agreement, upon a divorce, a court in New York would likely determine that the non-titled spouse is entitled to some portion of the value of the business. In a prenuptial agreement, you can designate your business as your separate property, including any appreciation or increased value of your business during the marriage.
If you are already married, it is not too late to have a conversation with your spouse about entering into an agreement that details the payment of certain expenses, how your property will be distributed upon death, and how your assets will be divided upon a divorce. At any point during your marriage, you and your spouse can execute a postnuptial agreement, detailing the same terms discussed above.
Berkman Bottger Newman & Schein LLP can help you explore your options regarding prenuptial and postnuptial agreements. To schedule a consultation with a New York City matrimonial law attorney, please calls us at (212) 466-6015, or reach out to us through our contact form today. We maintain offices on 5th Avenue in Manhattan, in White Plains, and in Bergen County, New Jersey.