Prenuptial Agreements: Common Questions & Answers
As Rockland County family law attorneys, we regularly receive a number of questions (and misconceptions) when it comes to prenuptial agreements, what they cover, and what rules apply to them. In a nutshell, a prenup is a contract you and your future spouse agree to before marriage, which sets out your rights and responsibilities with respect to property and assets in the event of divorce. Although sometimes a difficult topic to broach when two people are in love and planning their future, planning ahead and making sure you are both on the same page can be absolutely critical in terms of avoiding certain devastating (and surprising) consequences.
Below, we answer some of the common initial questions that individuals have when it comes to prenups:
What If You’ve Spent All Your Earnings in Living Costs? Do You Split Everything Made, or Everything Left, in Divorce?
In divorces here in New York, courts must split marital property (i.e. all cash, investments, and property the two of you accrued during marriage) “equitably.” This does not necessarily mean 50/50, but rather what’s fair, considering the circumstances – what each of you contributed, what each of you will need in moving forward, etc. In defining “assets,” the court looks at what currently exists in terms of your accounts, investments, and property, as well as future earning potential, etc. as opposed to what was already earned and spent.
What If Both Spouses Are Working – How Is It Calculated?
The court takes this into account in determining the overall equitable circumstances in the case – what each of you has the potential to contribute in the future, and what each of you will need. This includes past, present, and future earning potential.
What About Property Owned By One Individual, Pre-Marriage? IRAs, Etc.? Are You Forced To Liquidate Assets?
Separate property consists of the cash, investments, and property that each of you owned prior to marriage. This is not considered marital property. However, where things get tricky is when marital property is used to enhance or maintain one spouse’s separate property; For example, when cash from a joint checking account is used to renovate pre-owned (separate) rental property, or a business is formed or enhanced by marital assets during the marriage, etc. Like every other asset, this is considered marital property subject to equitable distribution in divorce. In addition, even a business that was created prior to the marriage but whose value increased during marriage is considered a divisible asset.
What If We Move?
Where couples are married in one state and divorce in another, the law of that second (and final) state applies if they have met the residency requirements of that state (six months, one year, etc.). There are also circumstances under which, if a couple, for example, lives in state A for 10 years and state B for one year, one spouse could argue that the divorce should be litigated in state A for the sake of fairness. The spouse who files needs to meet residency requirements to file for divorce in either state, meaning that a spouse who stays in state A can file or divorce there, even if the other spouse moved out of state. Ultimately, the courts determine the most convenient forum for the divorce and any associated proceedings, but this can also translate into a ‘race to file,’ so to speak, whereby whoever serves the petition for divorce on the other spouse (based on which state has particular benefits for that spouse) secures that the divorce will occur in that state.
Are Prenups Only for the Super Wealthy?
It is a common misconception that you only need a prenuptial agreement if you are incredibly wealthy and own a number of assets and/or businesses before and/or after marriage. In fact, a prenup is simply a good idea for anyone and everyone prior to marriage, with assets of any nature. A number of couples also find that it prevents disputes later on because it ensures that both individuals discuss and are on the same page when it comes to expectations.
Do I Need My Own Lawyer for a Prenup?
Because it is possible for the courts to hold a prenup invalid if there was any lack of transparency, coercion, duress, etc. involved in the process, it is a good idea for both spouses to have their own counsel during the process so as to ensure that it is fair and there is full transparency and understanding during the process.
Rockland & Westchester Counties, New York Prenuptial & Divorce Attorneys
Our attorneys are here to answer any questions you might have and assist you with any and all family law needs. Contact us at the Law Office of Robert S. Sunshine, P.C. today to schedule a consultation and find out how we can help.