A Prenuptial Agreement, or “Prenup,” is more than just a contract that is legally binding. Prenups can help you set up a solid plan for how your finances will work together as a married couple. This makes it easier for people to trust each other and talk to each other in the future. So, it’s a good thing to put money into. When negotiating, there should be a spirit of cooperation and openness about money matters. The goal is to go into the marriage knowing everything about yourself and what you can expect. Do you find yourself asking – do I need a prenup?
A prenuptial agreement is a healthy way to make sure that both people have an equal say in making decisions. It makes a record of what is considered separate property and what is considered marital property. Even though New York Domestic Relations law says how to divide property after a divorce or death, a court will still honor a valid prenuptial agreement that may be different from New York law. Under New York law, separate property is anything you owned before you got married, anything you inherited (before or during the marriage), and anything you got as a gift from someone other than your spouse. In a prenup, you and your partner can change what it means to have separate property. Many couples make their own rules about what will be considered separate property in the future. This changes what the law says is separate property. Some specific examples of provisions that can be made to fit each couple’s needs are: a) what happens to property bought during the marriage with the separate property but held in joint names; b) what happens to a primary residence (or other residences) that is the separate property of one party in the event of a divorce or death; c) whether a separate property will pass to the surviving spouse upon death even though it is separate property; and d) whether the surviving spouse has the right to live in the primary residence. Other couples talk about family businesses and/or how income earned during the marriage will be defined.
Here is a short list of things that can be written into a prenup and changed to fit the goals and needs of the future spouses:
- Defining separate property
- Defining what belongs to a couple
- Benefits for retirement earned before or after the wedding date
- How to file tax returns, including figuring out where to put income and deductions
- There are many things to think about when making an estate plan, such as how to take care of children from a previous relationship or family members from your family of origin.
- Laws about estate rights and giving up estate rights
- Agreements about the purchase of a primary or secondary home
- Agreements about a business are made before a couple gets married
- Agreements about the money that was made during the marriage
- Procedures for how to handle any future disagreements, such as with the help of a financial neutral or mediator.
One important thing to think about when making a prenuptial agreement is giving yourself enough time before the wedding to gather financial information, have meaningful talks, and have an independent lawyer look over the agreement carefully. An experienced lawyer will give you advice and guidance about the law and how your choices will affect you in real life. The law in this area is complicated, so you should talk to an experienced lawyer about how your specific situation might be handled in a prenup and by the law.