Putting a Prenuptial Agreement in Place Before You Get Married
In today’s world, it pays to take a realistic approach to marriage. While no one preparing for marriage imagines it will end in divorce, statistics show that nearly half of all marriages do. Through a prenuptial agreement, couples can plan for the future, protect their separate interests and preserve their assets. Consider it your own practical insurance policy.
To learn more about how prenuptial agreements work in New York state, schedule a consultation with an experienced Albany prenuptial agreement lawyer. Call 518-462-4242 or e-mail our family law office today.
Why Consider a Prenuptial Agreement?
There are a number of good reasons to consider a prenuptial agreement. These include:
- One spouse brings considerable financial assets while the other does not;
- One spouse forgoes a successful career in order to stay at home and raise the children;
- Either spouse owns part of a family business or has a business they do not want to be considered marital property;
- If the spouses have children from previous marriages; or
- If the spouses have significantly different goals.
What Can’t Be Put in a Prenuptial Agreement?
While you can logistically put anything you want in a prenuptial agreement, the court will only enforce it if the provisions of the agreement are legal. For instance, you can’t require a spouse to launder money for your underworld enterprises. Additionally:
- Child support and custody agreements cannot be reached in a prenuptial. In these cases, the courts have final say and will consider the best interests of the children regardless of what is placed in a prenuptial agreement.
- Waiver of a right to spousal support or alimony will likely be tossed out if it is deemed by the court to leave the other spouse destitute. It is more common for a spouse to limit alimony in a prenuptial agreement. If, however, a spouse is required to seek public assistance subsequent to the divorce, the state will nullify the alimony agreement.
- Provisions that incentivize divorce will likely be tossed. The court has a vested interest in preventing such provisions from being enforced.
Separate and Marital Property
No matter how controversial they once seemed, prenuptial agreements are now seen as useful tools for individual parties entering into a marriage. There is always a chance that separate assets will become commingled with other property. A prenuptial agreement can address the wishes of parties regarding separate property that generates marital property. Let us help you classify your assets and debts in advance of a potential divorce.
How Marital Property Works
Let’s say you and your soon-to-be spouse are both successful business owners running and operating your own businesses. The two of you want to keep these businesses from becoming entangled in a divorce proceeding. Under the law, your property is whatever you owned prior to the marriage. Whatever you accumulate during the marriage is part of your marital estate.
Business, Real Estate, and Other Investments
Here is where it gets tricky. Let’s say you and your spouse are together for ten years. During that time, your business takes off while your spouse’s goes under. Even though you built the business and the business is in your name, your spouse owns 50% of the value that was added to the business during your marriage. In some cases, this can result in quite a lot of equity in the business. The exact same situation is true of real estate or other investments that accrue value during your marriage. In other words, personal property is whatever the value of the asset (including a business) was at the time of your marriage and, whatever gains it made during your marriage. This is part of the marital estate.
One very prudent reason for getting a prenuptial agreement is to prevent your business or other assets from becoming title clouded during a divorce. A prenuptial agreement can have the stipulation that a business remains your personal property (and not property of the marital estate) regardless of what happens during the marriage.