Pre-nuptial agreements are not just for the rich and famous. Today more people are marrying for the first time at an older age. There are more second and third marriages because of high divorce rates and longer life expectancies. For these reasons there is a growing need for pre-nuptial agreements. And although a pre-nuptial agreement is not romantic, it may be smart financial planning for both spouses.
A pre-nuptial agreement basically is a contract between two people who are going to be married. The exact terms of the agreement will vary with the needs and desires of the parties.
The most common terms are those that identify the pre-marital property of the parties. These often provide that in case of a divorce this separate property will remain separate and will not be subject to equitable distribution.
Other terms may include waivers of claims for spousal support or maintenance, waivers of claims against particular assets, or waivers of inheritance rights.
Prenuptial agreements cannot be used for child custody or child support.
Individuals should consider having a pre-nuptial agreement if they:
- Have a home or another significant asset or assets;
- Own part or all of a business;
- Expect to receive a large inheritance;
- Have children from a prior marriage; or
- Will complete your education, or professional licensing during the
In New York, property owned by a party prior to their marriage is separate property. This would not be subject to equitable distribution in a subsequent divorce. However, separate property easily can lose its “separate” identity and become marital property.
For example, a separate asset that is managed actively during the course of a marriage may become a marital asset to the extent it appreciates from this active management. This can include a family business. Also, if separate and marital assets are commingled, the separate assets may lose their separate identity.
If there are children from a prior marriage, a pre-nuptial agreement can ensure that they will receive their parents’ assets upon the parent’s death. Otherwise, the new spouse may receive part or all of the deceased spouse’s estate and while their children can lose part or all of their inheritance.
A pre-nuptial agreement must be in writing. Both parties must sign it and a notary must acknowledge the parties’ signatures. Oral pre-nuptial agreements are not enforceable.
A pre-nuptial agreement should be done well in advance of a wedding. A last minute agreement may be more vulnerable to a challenge based upon claims of coercion, duress or fraud than an agreement that was executed well in advance of the wedding where the parties had ample time to consider its terms before signing.