This is a continuation of my previous post that explored what a “simple” prenuptial agreement looks like and when a more complex agreement may be needed. In this post we move beyond the basics of separate property and marital property to explore four more specific areas that a prenup can help clarify and solidify: distribution of marital property, real estate, spousal support, and estate rights.

Distribution of Marital Property

In New York State an asset earned during the marriage is considered marital property to be divided equitably. Keep in mind that “equitable” does not necessarily mean “equal.” Much litigation has ensued over how assets are to be divided. Prenups can be helpful because it allows a couple to make this determination at the beginning of the marriage. Many couples simply agree in their prenup that all marital assets will be divided equally. Others agree that those assets will be divided according to another set percentage. While still others agree that the division of the marital assets will change according to the length of marriage or other conditions.  

Real Estate

Real estate is often a big issue in many prenups because of the many ways that separate property and marital property are combined to purchase and/or maintain real estate. For example, a couple may purchase a home during the marriage (which is assumed to be marital property), with one or both spouses contributing a significant sum of his or her premarital money to the down payment. In this situation, the prenuptial agreement should make it clear that a spouse who makes a down payment will be entitled to a credit for that investment and what that credit will be. But will it be a dollar-for-dollar return on that investment, or will it be based on the increase in value of the home?

Some other questions I will ask about real estate include:

  • If you own your home prior to your marriage and you plan to live there as a married couple, will the mortgage and other carrying costs be paid from marital property or separate property?
  • If the marriage ends, how soon afterwards will the non-titled spouse need to vacate the home? Will the time frame be different if the couple has had children?
  • What will happen to the home if there is a divorce? Will it be sold?  How will the proceeds be divided? Will one person have the right to buy out the other?

Spousal Support

Prenups often address spousal support in one of these 3 ways:

  1. Both parties waive spousal support under all circumstances; or
  2. Spousal support is waived unless there are children and one of the spouses has stopped working to care for them; or
  3. The couple agrees in advance that specific spousal support amounts will be paid based on the length of the marriage, or the amount of assets being divided or some other terms.

Prenups become less “simple” as we move down that list.

Estate Rights

Your prenup can also specify how you will share property after one spouse dies. The simplest prenups just reiterate the law, which in New York means that a surviving spouse will receive his or her “elective share” of the other spouse’s assets. More complex prenups will specifically state that the deceased spouse’s separate property will not be shared upon death — or they may have a different scheme if the couple has children or if the death occurs while the couple is still married but has already decided to divorce.

A prenup is the perfect way to avoid having a judge make all of these decisions for you if your marriage ends with a divorce or there is a death. A qualified attorney will go through all the issues and ask all the questions that you might not ask yourself (or your future spouse), so that you can make sure the prenup protects both of you. It is what I call “conscious coupling,” and I consider it a sign of a strong marriage to come; it shows that you have foresight, are able to communicate with each other, and can deal with uncomfortable topics—the perfect practice for marriage.

To get started with a lawyer who has many years of experience drafting successful prenuptial agreements, and who will ask the questions you do not know to ask, contact us today.

Andrea Vacca

570 Lexington Avenue, Suite 1600
New York, NY 10022
avacca@vaccalaw.com

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It’s wedding season, and in addition to checking the typical wedding-related tasks off the to-do list, many soon-to-be newlyweds are reaching out to lawyers like me to draft prenuptial agreements. And one of the most common things they tell me is: “We just need a simple prenup.”

For the people who truly want a “simple” prenup, I have good news: You may not actually need one. A simple prenup may simply mean that you will be signing up to do exactly what the law dictates for divorcing spouses. So what does the law mandate?

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Divorce litigation is expensive; everyone knows that. But did you know that if your attorneys don’t get along, the cost will be 20% higher?  

I was struck when I heard that fact mentioned at a panel discussion on the topic of what mediation clients can expect if they end up in court. One of the panel members was a Supreme Court referee who handles matrimonial cases; she mentioned a survey that showed that if your attorneys are fighting with each other for the sake of fighting, you and your spouse are going to pay this significantly higher cost.

Attorneys who don’t get along are likely to be inconsiderate of each other and will deny what may seem seem like reasonable requests to yousuch as requests to change a deposition or court date due to a work conflict you may have, or give extensions of time to hand over the extensive amount of documents they’ve requested. If your attorneys are hostile toward each other, you can be sure that your divorce will take much longer than it should and you and your spouse will experience greater conflict with each other. Unfortunately, some clients actually think paying the financial and emotional costs associated with this kind of behavior is a necessary sacrifice; they figure if their attorneys cooperate with each other, then they can’t really be advocating for them.

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Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser—in fees, expenses, and waste of time. As a peacemaker the lawyer has a superior opportunity of being a good man. There will still be business enough.

–  Abraham Lincoln

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When divorcing couples choose to negotiate the terms of their divorces outside of the court system—whether through mediation or collaborative law—they typically have the best intentions going into the process. They want to be fair to each other; they want to conserve time and money by staying out of court; they want to keep their kids out of their disagreements.

But as the process moves forward, some realizations quickly set in: Negotiating financial and child-related issues that affect an entire family is hard work and probably won’t happen as quickly as everyone wants. Emotions flare, and not everyone is able to be their best selves at all times.

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The primary function of a consulting attorney is to provide advice and counsel during the mediation process and provide the support you need to advocate for yourself. This is different from a “review attorney” whose primary job is to review the agreement that has been drafted after the mediation process is over. These are 2 very different roles. If you took my previous advice and are interviewing consulting attorneys, these are 3 important questions to ask.

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I heard someone suggest that when thinking about New Year’s Resolutions you should think about what you can do that will have an impact in 200-400 years.  And that got me thinking about the work I do and how much of an impact it can have on families.

Personally, I want my work to live on through successive generations of families who communicate well and have healthy relationships with others.

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When it comes to choosing an alternative to divorcing in court, both divorce mediation and collaborative divorce have their own unique advantages.

Divorce Mediation

Divorce mediation is a private and confidential method of non-adversarial divorce in which the participants advocate for their own needs and concerns without a lawyer present in the room. The mediator will help the parties reach a consensus through a series of 3-way meetings. Although the negotiations are taking place between the spouses, it is highly recommended that each party has a consulting attorney during the process. The mediator is able to provide the couple with legal information, but a consulting attorney can provide a party with individual legal advice. Additionally, the parties may wish to consult other professionals such as appraisers, financial professionals, accountants, and divorce coaches.

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Mediation is a great process for maintaining limited involvement with attorneys, but they shouldn’t be shut out completely.

Recently I’ve spoken to a number of potential clients who are about to enter into the divorce process and want to use mediation. These clients come from different backgrounds and have different preconceived notions about mediation, but they all share the desire for an attorney-free divorce. And that is when I have the unenviable task of breaking the news to them: even in mediation, you need an attorney.

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Over the past few years, my law and mediation practices have seen a significant increase in requests for prenuptial agreements.  

My clients, whether they come from extensive family wealth, are self-made entrepreneurs, or young professionals just starting out in their careers, come to me with the best of intentions. They love their fiance and look forward to a long and happy marriage.  But sometimes their approach to the prenuptial agreement gets in their own way. The first thing to realize is that a prenuptial agreement, and the negotiations leading up to it, are often harbingers of what the future marriage will bring. Acrimonious prenup negotiations have a tendency to lead to acrimonious marriages, with long-term resentment and unhappiness.

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