|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 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?
Prenups often address spousal support in one of these 3 ways:
- Both parties waive spousal support under all circumstances; or
- Spousal support is waived unless there are children and one of the spouses has stopped working to care for them; or
- 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.
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.
Vacca Law & Mediation
60 E 42nd St #1420
New York, NY 10165