Prenuptial agreements? Postnuptial agreements? What's the difference? This article offers a brief overview of prenuptial and postnuptial agreements, specifically within the context of applicable New York State laws.
What is a Prenuptial Agreement?
A prenuptial agreement (commonly referred to as a “prenup”) is a legal contract created before the parties get married. It outlines the procedure for distribution of property and assets, in the event of a divorce, separation, or the death of one partner.
Are Prenuptial Agreements Legally Binding?
In New York State, prenuptial agreements are enforceable, when they are in writing, signed by both parties, and duly acknowledged with the same formalities as a deed (meaning deed-level notarization).
Requirements for a Valid Prenuptial Agreement in New York
Pursuant to New York's Domestic Relations Law (236(B)(3)), prenuptial agreements must meet the following criteria to be valid:
- Written Agreement: The prenuptial agreement must be a written document, signed by both parties. In New York, prenuptial agreements only take effect upon marriage and must be executed with the same formalities required for a property deed.
- Acknowledgment: It must be properly notarized to ensure its authenticity.
- No Coercion: Both parties must enter into the agreement voluntarily, with full knowledge of its terms. Any signs of duress, lack of mental competency, or unconscionability could render the agreement invalid.
What Can a Prenuptial Agreement Address?
Prenuptial agreements can be uniquely customized to address various financial aspects, depending on each couple's unique circumstances. Generally, these agreements can cover:
- property division (both separate and marital);
- allocation of financial accounts, investments and retirement funds;
- spousal support or spousal maintenance; and
- estate rights.
What Cannot Be Included in a Prenuptial Agreement?
There are some limitations on what can be addressed in a prenuptial agreement:
- Child Custody: Prenuptial agreements cannot provide for custody arrangements for future children. Custody decisions are made based on the child's best interest at the time of divorce, not a prenuptial agreement.
- Child Support: Likewise, prenuptial agreements regarding child support for future children are not enforceable and must be addressed at the time of divorce.
Common Examples of Invalidated Prenups
- Fraudulent Financial Disclosure: New York State law requires both parties to disclose all assets, debts, and income fully before execution of a prenuptial agreement. While there are no specific quantitative amounts that must be disclosed in a prenuptial agreement in New York, it is advisable for both parties to fully disclose all assets and debts in order for the agreement to be considered valid and enforceable. Furthermore, each party must have the opportunity to review and seek legal counsel regarding the financial disclosure before signing the prenuptial agreement.
- Untimely Manner: The prenuptial agreement must be signed in a timely manner before nuptials occur. New York State law does not mandate a legally required specific time period that the agreement is required to be signed. However, it is generally recommended to sign a prenuptial agreement well in advance of the marriage, as signing too close to the wedding could look like duress.
- Unethical Terms: If the terms of the prenuptial agreement are unjustly unfair, the agreement can be considered void. This does not immediately apply to cases in which one spouse receives less than the other spouse. The agreement can be void if the agreement is so unjust that it leaves one spouse wholly unable to support themselves and in an incredibly disadvantaged financial position. A New York court will consider the relevant circumstances surrounding the prenup and analyze its overall fairness.
- Fraudulent Signature:/Defective Notarization or Acknowledgment If a spouse forges the other signature or obtains their signature by lying or concealment of the facts, the prenuptial agreement can be invalidated.
Prenuptial vs. Postnuptial Agreements
While prenuptial agreements are created before marriage, postnuptial agreements (colloquially known as a “postnup”) are created after the couple is married. Accordingly, a postnuptial agreement serves the same purpose as a prenuptial agreement.
A postnuptial agreement allows couples to manage their financial rights and responsibilities during the marriage, including asset division in the case of divorce or death. Although New York law already outlines the default division of property in such cases, a postnuptial agreement lets the couple tailor their plan to their specific situation.
Closely resembling prenuptial agreements, postnuptial agreements are valid if both parties disclose their assets fully, fairly, and enter into the contract voluntarily. Courts will uphold these agreements if they are fair and balanced for both parties.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
