While approaching your soon-to-be spouse with the idea that you would like a prenuptial agreement is a sensitive topic, for many individuals it is a necessary part of the pre-wedding planning process.  It is best to discuss a prenuptial agreement as early as possible when embarking upon marriage with your partner.  This may be discussed before engagement so there is a level of transparency once the next step is taken.  Certainly, shortly after the engagement, the desire to have this legal document drafted prior to the nuptials should be expressedto avoid any undue pressure as the wedding date approaches.

Before exploring whether a prenuptial agreement is right for you, you should be aware of the following basic divorce law principles.  First, assets acquired prior to marriage are, by definition, separate property.  However, depending upon the nature of the asset, the asset, or a portion thereof, could be considered marital property at the time of a divorce.  Second, assets acquired during the marriage, with only a few exceptions, are considered marital assets to be divided upon divorce. 

The following are a few reasons why you might consider entering into a prenuptial agreement prior to marriage:

  • You own a business. Even if you own a business prior to marriage, the efforts you make during the marriage towards its growth can make the appreciation in value marital.  That appreciation can be distributed upon divorce.  A prenuptial agreement will be able to protect the possibility that your business is valued during divorce, and that there is a potential payout of value to your spouse. 
  • Your family has established, and may continue to establish trusts for your benefit, and/or you may come into a large inheritance. Inheritances and gifts from third parties are considered separate property even if acquired during the marriage.  However, depending upon how you handle receiving and investing the asset(s) during the marriage, there is the potential for exposure.  Having a prenuptial agreement will allow for the identification of certain assets and make clear their separate nature even if certain acts are taken during the marriage. 
  • You have children from a prior marriage. A prenuptial agreement can not only address what happens between the parties upon divorce, but also upon death.  You can make sure to retain certain assets upon divorce that you intend to preserve for your children.  In addition, in New York, there are certain laws that protect spouses upon the death of the other spouse even if that spouse is not provided for in the deceased spouse’s will.  A prenuptial agreement can provide for a waiver of these laws so that the deceased spouse’s will can control the distribution of his/her estate upon death to ensure that the children receive what they are intended to receive. 
  • You have acquired assets prior to your marriage.Although assets acquired prior to your marriage are separate property, a prenuptial agreement will provide clarity of what assets are premarital and shall remain separate in the event of a divorce. Furthermore, a prenuptial agreement can address the sale of any such premarital asset and subsequent purchase of a new asset(s) with the proceeds from the sale of the separate property asset.  Of importance is if the premarital asset is a residence that you will be residing in with your spouse.  A prenuptial agreement will ensure that the asset is not converted into a marital asset based upon actions taken during the marriage.

If you believe that a prenuptial agreement may be appropriate in your situation, contact a member of Geffner Kersch for an exploratory conversation of your specific needs.