A prenuptial agreement, also known as a prenup, is a legal document that engaged couples create before they get married. Its primary purpose is to establish the financial and property rights of each spouse in the event of a divorce. Prenups can also address a variety of other issues, providing a clear blueprint for how the couple's affairs will be handled throughout the marriage and potentially after the marriage ends. It's an important means of preparation for the future and can give both parties peace of mind.
What Can You Include in a Prenup in New York?
Since each individual's financial situation is unique, the prenuptial agreement they create should be too. However, there are key commonalities in what should be included in a comprehensive prenup. Below, we discuss the essential elements to consider for your prenup, ensuring you've got all bases covered for a clear and detailed agreement:
- Financial Disclosures – Before diving into any specifics, it's crucial that both parties provide full and honest financial disclosures. This is the foundation for a fair prenuptial agreement and ensures that both individuals are fully aware of the other's financial standing. Key pieces of financial information to include are statements for all bank accounts (including checking, savings, and investment accounts), documentation for any real estate owned (such as the marital home, vacation properties, or rental units), Lists of vehicles (including cars, boats, or motorcycles), details of any businesses owned or shares held in companies, and history of debts (from mortgages and car loans to student debt and credit card balances). Open and transparent financial disclosure is not just a safeguard for each individual, but it’s also a solid start in practicing honesty and trust.
- Asset and Liability Division – A significant portion of a prenup focuses on how assets and liabilities will be handled in the event of a divorce. Clear guidelines are essential to avoid disputes and emotional turmoil down the line. Consider the following when laying out the division: identification of separate properties (owned before marriage or acquired through gift or inheritance during the marriage), provisions for any jointly acquired property (including the process for valuation and division), and plans for the division of any debts acquired before or during the marriage. In some cases, couples may choose to divide assets unequally, depending on the circumstances. The key is to ensure that the agreement reflects the couple's values and recognizes their joint and individual contributions.
- Spousal Support – Deciding on spousal support (alimony) can be complex, but a prenup offers a vehicle by which this can be agreed upon well in advance. Factors to consider include the duration of support (especially if one spouse gave up a career or education for the marriage), the amount of support (which can be calculated based on a variety of factors including income discrepancies and the length of the marriage), and any potential changes (such as concurrency with child support or modifications if circumstances change significantly). Spousal support arrangements can vary widely, so it’s important to think through what arrangement makes the most sense for both parties.
- Inheritance and Estate Planning – Prenuptial agreements can also encompass inheritance and estate planning, ensuring these important financial matters are addressed. This may include provisions about each spouse's right to property and assets in the event of the other's passing, agreed-upon stipulations regarding the distribution of assets in the case of divorce or death, and considerations for updating wills and trusts during the marriage (including the timeframe for their review and amendments). Addressing inheritance and estate planning gives the couple peace of mind that their wishes are clearly laid out and legally binding.
Prenuptial agreements are not only for the wealthy. They are tools that any couple can use to protect assets, clarify expectations, and safeguard the future. This blog post gives a strong starting point for engaged couples to create a comprehensive prenup. However, given the intricacies of family law and the unique nature of every relationship, it's highly encouraged to seek the assistance of a qualified legal professional to tailor the prenuptial agreement to your specific circumstances.
To learn more about prenuptial agreements in New York, or to begin the process of creating a prenup, give Arnel Law Firm a call at (718) 550-3024 or contact us online today.
