While people often focus on the romance of a marriage, under the law, marriage is a contractual obligation. When you enter into any contract, you want to ensure there are safeguards in place in case something unexpected happens.
Prenuptial agreements are one of those safeguards. For this reason, they have earned a bit of a reputation – but they are useful tools for protection, not pessimism. Before a marriage, individuals may purchase a home, start a successful business, contribute to retirement and savings accounts, and invest in artwork, collectibles, or other high return assets. These assets can be protected through a prenuptial agreement, as long as you and your spouse are completely honest with one another about the assets you have, and the ways you would like them to be distributed in the event of a divorce, or of a death.
In short, prenuptial agreements allow you and spouse to be more creative when it comes to assets, alimony, and other family law considerations.
How a premarital agreement protects what is important
The question to ask yourself is this: are you willing to risk your financial future, and the financial security of your children, by allowing the possibility of your emotions (or your spouse’s) overpowering reason in a possible future divorce? Prenuptial agreements provide couples with legal security and predictability: you can protect the wealth you have amassed, and you can ensure that your wishes are followed, as opposed to leaving it up to chance during a hearing.
Prenuptial agreements can also eliminate costly probate disputes over estate assets should either of you pass away. You can set a distribution amount to care for your current spouse in the event of your death, or establish inheritance rights if you have children from a previous marriage or relationship.
A well-crafted prenuptial agreement can also eliminate doubts over motives for marrying, staying together, or leaving when you both know that there is no financial advantage. Because of this, signing a prenup can help eliminate any potential arguments between you and other family members.
Can my prenuptial agreement include assets my spouse and I don’t own yet?
Under New York’s laws, you keep your separate property, but marital assets still need to be divided equitably. The collections you build, the objects you buy, the items and money you accrue during the course of your marriage – these assets (or, at least, their increased value) are generally considered marital property.
With a prenuptial agreement, you and your spouse can decide from the start that certain assets will automatically go to one spouse or the other. You can also outline how to divide the increased value. For example, a prenuptial agreement may include a clause that your spouse will retain ownership of a primary home renovated with marital funds, but that a secondary home would automatically go to you in the event of a divorce, even if the secondary home is not equal in worth to the primary home. Or, your prenuptial agreement may state that your pension will remain with you, in exchange for an equitable division of any other retirement funds. Couples can be creative with asset division, one of the primary benefits of a prenup.
We married without a prenup; what can we do to protect ourselves now?
New York allows married couples to create postnuptial agreements, as well. One of our matrimonial attorneys can help you craft this document if your current prenuptial agreement is no longer sufficient, or if your circumstances have changed.
The award-winning Manhattan divorce lawyers of Berkman Bottger Newman & Schein LLP understand the importance of protecting your assets, now and in the future. Our trusted New York City team serves clients throughout the five boroughs, Westchester, and Hackensack, New Jersey. To reserve a consultation with one of our knowledgeable attorneys, call 212-867-9123 or use our contact form.