Prenuptial Agreements

New York Prenuptial Agreements

Individuals routinely contact our office inquiring about the protection and self-preservation of their assets in contemplation of marriage. These inquiries are not just related to protection of assets prior to entering into a second marriage but commonly are focused on the first marriage as well. 

New York law allows couples to negotiate and enter into a written agreement prior to the marriage which typically defines each parties separate property and prevents such property from becoming marital property subject to division upon dissolution of the marriage. Such agreements also typically define what property accumulated during the marriage will be considered marital property and is also used to define all important issues in the marriage.  These issues can include: spousal maintenance/support, child custody, child support, debts, and business ownership, income and inheritance rights to name a few. 

Whether or not you require a Prenuptial Agreement depends upon your particular preferences, assets, and desire to maintain financial independence and to provide for an orderly dissolution of the marriage. These agreements are not uncommon and are utilized by consenting educated adults who prefer to avoid the pitfalls commonly associated with a dissolution of the marriage such as divorce or legal separation.

While these types of premarital agreements are commonly utilized, that is not to say that they should be entered into without seeking competent legal advice. There are many legal formalities and requirements that must be addressed and complied with to ensure that the agreement comports with the law.

Only after a comprehensive analysis of your individual facts and the law will you be in a position to determine whether a Prenuptial Agreement is the right choice for you. At the Law Offices of David Smoren, PLLC we have the experience to assist our clients develop their goals and deciding what is best for their individual situation. Based upon the best practice standards, we will implement your financial and other pre and post-marital goals into a comprehensive written agreement that will set forth each party’s rights in the event of a divorce or separation.  

Call us today at 718 225-6700 or for a free phone consultation or to arrange for a comprehensive office consultation to discuss your options or simply post a comment or question on the contact form.

New York – Prenuptial Agreements – The Basics

In New York prenuptial agreements are governed by Domestic Relations Law Section 23 (B)(3) (DRL§23(B)(3). Specifically,  this section confirms that a Prenuptial Agreement is recognized under the law and valid and enforceable in an action to dissolve the marriage provided that it is in writing, subscribed by the parties, and   acknowledged or proven in the manner required to entitle a deed to be recorded. 

New York law specifically identifies four common marital issues that can be incorporated into a prenuptial agreement :  

•  The right to make testamentary provisions of any kind, or a waiver of any right   to elect against the provisions of a will;
• Provisions for the ownership, division or distribution of separate and marital property; 
• Provisions for the amount and duration of spousal maintenance;  
• Provisions  for  the  custody,  care,  education  and  maintenance  of  any  child of the parties.

The specific provisions listed above are not exhaustive; a prenuptial agreement can define practically any other terms and conditions of the marital relationship.

As stated above, a prenuptial agreement is a commonly used tool in the area of family law. However, the law is not without its exceptions. Premarital agreements can, like any other contract, be challenged in court when a party is seeking to enforce its terms. Perhaps one of the most common scenarios for challenging a prenuptial agreement is where the parties have subsequently been married for a considerable period of time and circumstances, especially financial, have significantly changed or have taken on a new meaning.

Challenges to a prenuptial agreement include:

• Lack of formal acknowledgment by the parties;
• Fraud, duress, or coercion;
• Lack of financial / asset disclosure;
• Waiver of spousal support & need for public assistance;
• Change in circumstances; 

To overcome a challenge as to the formalities of a prenuptial agreement it is imperative that the agreed upon terms are reduced to writing, executed by both parties and acknowledged in the form required for filing a deed. While this seems easy enough, don’t assume this is something you should do without proper legal guidance. An experienced matrimonial attorney will assure that you agreement is upheld if ever challenged on these formality issues.

In the absence of fraud, duress or coercion, a prenuptial agreement is presumed valid. This presumption can be overcome, but the party seeking to vacate such agreement bears the burden of proof as to its invalidity under the law. To prove coercion or duress the party seeking to avoid the agreement must demonstrate that he or she was somehow pressured into signing the agreement or promised things outside of the agreement.  To overcome such a challenge, legal practitioners experienced in this area insist that both parties be represented by counsel of their own choice in the negotiation and execution of a prenuptial agreement.

Absent unusual circumstances, It is extremely difficult for a party to prove duress or coercion after having had a full opportunity to discuss the agreement with their own matrimonial attorney. In addition to having independent counsel for each party, it is also imperative that the prenuptial agreement “have time to breathe” prior to its execution. It is extremely dangerous to enter into such an agreement just days prior to the wedding. If possible, a minimum of 30 days should be provided between the final negotiation of the terms and the actual wedding. This would allow both parties ample time to discuss and reflect on the terms of the agreement.

Fraud is a challenge that seeks to vacate a prenuptial agreement based upon false promises by one party which were reasonably relied upon by the other to enter into the marriage.  In essence,  one would have to prove that the other party made false promises, written, verbal or otherwise,  together with other determinate factors, solely to induce the marriage with such promises tending to indicate that the prenuptial agreement was not an enforceable contract and simply ceremonial in nature.

In response to such challenge, it would be prudent to allow ample time for the agreement to breathe, have independent legal representation and a memorialized acknowledgement that neither party is relying upon any statement, promise or anything else other than that contained in the written agreement.

Lack of financial and asset disclosure in a prenuptial agreement is yet another area where a party can seek to overturn the agreement.  Oftentimes parties will decide not to specifically identify their assets, wealth and/or income as part of the agreement.  Instead they typically specify property as either being separate or marital, with separate property encompassing all property titled solely in their respective names. Problems may arise when one spouse is not made aware of the extent of the separate property or income of the other, but waives their rights anyway.

How can a party to an agreement knowingly waive their rights to property if they do not know the nature and extent of the property they are waiving?  That is precisely the question that courts struggle with when presented with this type of challenge. Surely one would think that by operation of the DRL and its “separate property” provisions there would be no need for specific disclosure. However, it is not the separate property alone that is problematic. It is the full disclosure of extent of the wealth of the parties that may reflect on one’s ability to knowingly enter into the prenuptial agreement. For example, knowing the extent of the assets and income could easily affect ones decision whether or not to waive spousal support, inheritance rights or to set a cap on child support.

To combat these type of non-disclosure attacks, practitioners usually include provisions in the agreement stating that both parties have made full disclosure to each other of the extent of their assets, wealth and income prior to the execution.  However, the problem arises when such disclosure does not take place, is inadequate or the parties waive their right to disclosure altogether. In such cases there is a risk that the agreement will be set aside by the court.  This is a case specific determination and will depend on whether the parties were represented, their level of sophistication and economic status.

The above is an overview of some of the issues involved in drafting and determining the validity of a prenuptial agreement. Whether you are considering a prenuptial agreement, require an attorney to draft, review, or are questioning the validity of an existing agreement, at the Law Offices of David Smoren, PLLC we can help.

We have successfully drafted, reviewed, and negotiated numerous prenuptial agreements that have resulted in the achievement of our client’s goals. Call us today at 718 225-6700 for a free phone consultatio or to arrange for a comprehensive office consultation to discuss your specific concerns, or simply post a comment or question on the contact form.