Prenuptial and Postnuptial Agreements
A prenuptial agreement is an agreement entered into between the parties prior to marriage which primarily addresses issues relating to the distribution and ownership of property in the event that that the marriage fails or one of the parties dies. A postnuptial agreement is basically the same as a prenuptial agreement except that it is executed by the parties after they are married. Both forms of agreement provide a critical mechanism for protecting one’s assets and for eliminating uncertainty with respect to the distribution in case the marriage dissolves.
Our office reviews, drafts, and negotiates both prenuptial and postnuptial agreements. We also represent clients in disputes which arise regarding the enforceability of such agreements.
Both prenuptial and postnuptial agreements can address multiple issues relating to the marriage. To understand the potential benefit which such agreements can offer, it is important to understand the distinction between marital property and separate property. In general, the property and assets you bring with you to a marriage is called separate property. Marital property, in contrast, generally consists of all property accumulated during the course of a marriage by either or both spouses prior to the execution of a separation agreement or commencement of a divorce action. Both types of agreements can serve to define what may otherwise be considered as marital property under the law as being the respective property of such spouse. By mere example, in the instance that one spouse purchases real estate prior to the commencement of the marriage and desires that such real estate remain his or her own separate property, both a prenuptial and postnuptial agreement can help ensure that this occurs. In absence of such an agreement, at least a portion of such real estate would be marital property and subject to equitable distribution to the other spouse if the marriage fails.
Maintenance is another example of an issue which can be addressed in such agreements. Both a prenuptial and postnuptial agreement, for instance, can dictate how much maintenance a spouse will be paid during and after a divorce. The parties can also agree that no maintenance will be paid in the instance that they are divorced. Both types of agreements can also establish pre-marital debt as being the sole responsibility of the spouse that incurred such debt so as to prevent the other spouse from being burdened with same. While such agreements can also provide for custody and visitation arrangements, such provisions will not necessarily be enforceable and will be subject to judicial review to ensure that they are in the best interest of the children.
In order to be enforceable, both prenuptial and postnuptial agreements must be signed by the parties and acknowledged before a notary. Oral agreements are not enforceable. Prior to executing either form of agreement, it is critical that each party discloses its assets to the other party in order to allow the respective parties to make informed decisions regarding the content and terms of the agreement. It is also critical that each party to the agreement be represented by separate counsel. Not only will this ensure that each party receives independent legal advice and but also lessens the chance that the agreement will be successfully challenged in court in the instance that there is a breakdown in the marriage.
Provided that they are properly executed and drafted, both prenuptial and postnuptial agreements are presumed to be valid under New York law. However, there may be certain basis for challenging the validity of such agreements. As alluded to above, one basis might be if the parties were represented by the same attorney when entering into the agreement. If they were, a court will likely examine the agreement more closely to see whether it is fair or whether it favors one spouse over the other. Fraud is another basis for challenging such agreements under New York law. If one spouse intentionally fails to disclose assets to another spouse, this could render the agreement invalid. Coercion and duress provide another basis which a New York court might cite to decline to enforce a prenuptial or postnuptial agreement. So, for example, a court might hold an agreement to be invalid if one party was not provided with sufficient time to review its terms. A New York court may also refuse to enforce a prenuptial or postnuptial agreement if the terms contained therein are inequitable or unfair.
If you are contemplating executing a prenuptial agreement or postnuptial agreement or if you are involved in a dispute regarding such agreements, please contact us today for a free telephone consultation to discuss the matter.