Articles Posted in Prenuptial and Postnuptial Agreements

I recently read an article on The New York Times wellness blog by Tara Parker-Pope called ‘The Decisive Marriage.’ In it, Parker-Pope explores the research gathered through The National Marriage Project and asks how does being decisive – or not – affect a marriage? Though it is not mentioned in the article, I thought some of the points would be especially helpful for people considering a prenuptial agreement. Parker-Pope writes:

Couples should make active decisions about their relationships and major life events. Showing intent in some form — from planning the first date, to living together, to the wedding and beyond — can help improve the quality of a marriage over all.

Prenuptial agreements are, by definition, a written agreement reflecting the intentions of the parties regarding their marital rights and obligations. By looking together toward the future, prenuptial agreements can help the couple to purposefully plan for this important, next stage of their relationship. Questions can be discussed and answered such as:

  • How will property be divided upon death or divorce?
  • Will spousal support be paid? If so, under what conditions?
  • How will household expenses be paid during the marriage?
  • Will having children result in different financial terms?

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Gwyneth Paltrow and Chris Martin have made the news lately with their “conscious uncoupling” – a new term for a mindful divorce that is an excellent example for separating couples to learn from.

Like most people, I had never heard of this term until it was talked about in the media. As it turns out, whether I knew the term for it or not, the philosophy behind conscious uncoupling is exactly why I encourage my clients to use the collaborative law process or mediation when they are ending their marriages. It is also the reason why I use these non-adversarial processes to help couples enter into prenuptial agreements; it’s what I call conscious coupling.

Conscious coupling – as opposed to Paltrow’s and Martin’s uncoupling – is best embodied in a well thought-out and fair prenuptial agreement. Instead of focusing on keeping as much of a party’s income and assets out of the hands of the other spouse in the event of divorce, a prenuptial agreement that is entered into consciously will focus more on:

On June 26, 2013, the United States Supreme Court declared parts of the Defense of Marriage Act (DOMA) unconstitutional. The decision, a huge civil rights victory for the gay community, will require federal law to recognize same-sex marriages the same way they recognize heterosexual marriages. This will grant same-sex spouses (at least in states that recognize same-sex marriage, such as New York) countless benefits that had previously been denied them under the statute. Now, same sex couples will be able to file joint income tax returns, enjoy spousal and survival status under Social Security, inheritance and estate laws, and be entitled to COBRA and other health insurance benefits. Effects on immigration have been among the most dramatic and immediate, as American citizens can now apply for permanent resident visas, or green cards, for their foreign-born same-sex spouses. Couples began receiving notification of approval for green cards as early as June 28.

As matrimonial attorneys, we are excited about this decision, not only because of the impact it will have on the same-sex couples that are married or contemplating getting married in New York, but also because of the ways in which it will affect the practice of matrimonial law. Previously, any agreement between same-sex couples, whether prenuptial or separation, required drafting around the federal benefits to which married heterosexual couples are automatically entitled with no way to compensate for the omission. Granting same-sex spouses the same federal rights as their heterosexual counterparts allows not just for more equality but also more uniformity under the law.

We applaud the Supreme Court for recognizing this and look forward to further advancements in same-sex rights.

Historically, it has been notoriously difficult to get a prenuptial agreement thrown out in New York. This is because there is strong public policy in favor of allowing individuals the freedom to enter into their own contracts. Often, when prenuptial agreements are overturned by the court, it is due to a defect on the face of the document, not on the terms of the contract itself. It is for this reason that we highly advise our clients to completely understand what they are signing when entering into these agreements.

A Nassau County woman, Elizabeth Petrakis, has recently succeeded in convincing a unanimous panel of the Appellate Division, Second Department that her prenuptial agreement should be set aside on the basis of fraudulent inducement. (Read the opinion here.) She claimed that her husband purposefully lied to her so that she would sign an agreement that he knew she wouldn’t have signed if he told her the truth. Ms. Petrakis claimed that just 4 days before their wedding, her husband convinced her to sign a prenuptial agreement that would provide him with all of the assets in the event of divorce by promising her that he would “tear it up” when they had children. Her husband, Peter Petrakis, claimed that he never made that promise. After a trial that lasted 13 days over the course of 9 months, the trial judge determined that he believed the wife’s testimony over the husband’s and he set aside the prenuptial agreement. The Appellate Division has now upheld that decision.

I agree with other attorneys who are concerned that this case could lead to dangerous precedent.

In previous blog posts we discussed the reasons why postnuptial agreements are becoming more popular and how to ensure that your postnuptial agreement is enforceable under New York law. If you’ve decided that a postnuptial agreement is something that you want to pursue, it is important to be adequately prepared for the negotiation process. These are some suggested steps that you should take before you begin:

• Write Down Your Own Goals And Concerns – It is easy to become overwhelmed by all of the questions you will have and to get distracted by all the issues that you may want to resolve. Likewise, it is easy to lose sight of the big picture and, due to the nature of the agreement, become overwhelmed by emotion. Taking time before negotiations begin to write down your long-term goals and concerns will help you maintain your focus on ensuring the best possible outcome for you and your spouse. It will also aid the negotiation process. By articulating a defined goal rather than becoming attached to a specific formula or percentage, both spouses are more likely to use creativity in finding a solution.

• Become Familiar With Your Assets And Liabilities – You cannot enter an agreement concerning your financial future without understanding your current financial circumstances. Familiarize yourself not just with your current property, debts, salary, and investments, but also what you and your spouse’s potential earning capacity may be, any anticipated increase in asset values or liabilities, and any expected inheritance or trust payouts. You may find it helpful to consult with a financial advisor who has experience working with clients who are negotiating postnuptial agreements.

In Part 1 of our series on postnuptial agreements, we discussed six reasons why postnuptial agreements are gaining popularity; in Part 2, we will identify the most important factors in ensuring your postnuptial agreement is legally enforceable in New York.

Postnuptial agreements are, first and foremost, contracts between married parties. However, they differ from standard contracts in one fundamental way: Unlike traditional business contracts, the parties entering into postnuptial agreements owe a higher duty toward each other – what the New York courts have called “a fiduciary relationship requiring the utmost of good faith” (Petracca v. Petracca). For the court to uphold a postnuptial agreement, there must be a heightened level of fairness to each party. Accordingly, in the event that you decide to draft a postnuptial agreement, or you are presented with one by your spouse, you should make sure the following features are present:

• Consideration – This legal term essentially just means that each party is giving something up (it can be tangible, like real estate or money, or intangible, like a legal right or the value of a graduate degree) in exchange for what that party is receiving. Courts will not uphold an agreement in which one party is required to give up all of his or her expectations in a potential divorce, but the other party makes no concessions.

Requests for postnuptial agreements are on the rise in New York and across the country. According to a recent survey by the American Academy of Matrimonial Lawyers (AAML), more than half of its members have seen an increase in the number of clients requesting postnuptial agreements.

A postnuptial agreement is a contract entered into by married couples that provides terms that will govern in the event of death or divorce, including how to divide assets, the relinquishment of certain property rights that spouses would otherwise be entitled to and the terms of spousal support and child support.

Why Might A Couple Want A Postnuptial Agreement?

The summer months have traditionally been the most popular for weddings, which could be why calls to my office from couples seeking prenuptial agreements tend to increase each spring. Following is an “encore presentation” of an article regarding such agreements that was published on this site last July.

A prenuptial agreement is a written agreement that both members of a couple enter into before their marriage. This agreement spells out how assets are distributed in the event of divorce or death. Though they are commonly associated with wealthy couples, in reality, couples from any socio economic background can seek a prenuptial agreement. In order for the agreement to be valid, both parties must enter into it knowingly and voluntarily. If any coercion is involved, the agreement is invalid.

Many couples avoid prenuptial agreements because they don’t want to believe that their marriage could end in divorce. Yet a “prenup” does not have to mean that you are hostile toward your future spouse. In fact, it can actually be a way to make sure you and your spouse are on the same page during the marriage and avoid hostility during a divorce. Here are some of the top reasons for getting a prenuptial agreement:

New York is now the seventh (and largest) jurisdiction to recognize same-sex marriage. This is an important and wonderful right for many couples and their families, which was evident in the media as we saw the first of these smiling and ecstatic couples marrying on July 24, 2011 and the days that followed.

While it may not seem romantic to think about these happy couples facing divorce and separation after they have waited so long for the right to marry, same-sex couples need to be extra vigilant to protect themselves and their families in the event that they decide to end their marriage. Some of the issues about which they need to be concerned include:

Lack of Federal Rights