How a Prenup Works in New York, NY

A prenup is usually used by couples in order to mainly identify, prior to marriage, which assets are separate and which ones are marital. However, prenups can also address spousal support, child custody, child support and other divorce issues, in case there is a separation. Courts, however, are not obligated to observe child custody and child support clauses in prenups. Courts will always evaluate prenup provisions related to children to see if they are for the best interests of the child.

What is in a Prenup

A prenup can address many different issues, such as but not limited to:

• the identification of marital and separate property, including the classification of future property;
• the amount of spousal support or alimony;
• child custody, child support, and visitation issues;
• establishing debt incurred prior to the marriage;
• establishing support for children of a prior marriage;
• protection of pension and retirement accounts; and
• protection of business and intellectual properties.

Requirements of a Prenup

To be valid, a prenup in New York must comply with the following requirements:

1. It must be in written form;
2. It must be signed by the future spouses before the marriage; and
3. It must be notarized.

In addition, the future spouses must actually marry in order for the prenup to be valid. If the future spouses sign the prenup but break up before getting married, the signed prenup will not be valid, enforceable, or effective.

Challenging a Prenup

The prenup may also be questioned and challenged before the court on the following grounds:

• No separate attorneys - The future spouses used one attorney and the prenup is unfair for one spouse and in favor of another.
• Fraud - One future spouse misrepresented his assets and financial situation.
• Unconscionable - The prenup was severely unfair and inequitable at the time it was signed. For example, a prenup that has left one spouse with absolutely nothing during divorce can be considered unconscionable.
• Coercion or duress – One future spouse was forced to sign the prenup under pressure or was not given enough time to review the prenup before signing. However, the threat not to marry if the prenup is not signed is not considered duress or coercion.

When to Sign a Prenup

Although it is recommended for most spouses to sign a prenup before marriage because it gives the couple the choice to decide on their future in case there is separation, most couples might consider the prenup an additional expense that is not really necessary.

In some cases, however, a prenup is recommended when:

One future spouse is wealthier than the other

Although one might think that the prenup will not benefit the poorer spouse, this is a wrong impression. A prenup can also benefit the poorer spouse because the poorer spouse can already negotiate on issues of spousal support or alimony. Usually, an “escalator clause” is inserted in a prenup to make the amount of support or alimony dependent on income or the number of years the couple is married.

You have children from a previous marriage

In New York, the spousal right of election entitles a spouse to the greater of $50,000 or 1/3 of the net estate upon the other spouse’s death. To go around this provision, a future spouse can waive this spousal right of election in a prenup, allowing you to leave a majority of your estate to your children from a previous marriage. If this is not addressed, when you die first before your subsequent spouse, your spouse may inherit most of your property, and when she dies, it goes to her heirs (who are not your children from a previous marriage).

If you were not able to address this in a prenup, you can still execute a post-nuptial agreement with your spouse. If your spouse refuses to sign a post-nuptial agreement, you can consult an estate planning lawyer on the use of a qualified terminable interest property (QTIP) trust.

You would like to identify which property is separate and which property is marital

A prenup allows the spouses to determine which property is separate and which property is marital. For example, you use a prenup when you have a business or you have a sizeable inheritance you expect to receive in the future that you’d like to keep as separate property. You can also state that income from this particular source is separate while income from another source is marital.

Remember however that, despite the fact that you have identified certain property as separate or marital in a prenup, your actions during the marriage can make separate property be deemed marital. For example, if you have a house that you already purchased prior to the marriage, and during the marriage, you transfer the title to both you and your spouse, the house may be deemed to be marital property because you are considered to have made a gift to your spouse. Another example is, if you receive inheritance from your deceased father during the marriage, this is considered separate property. However, if you place this money in a joint account with you and your spouse as account holders, instead of putting it in a separate bank account in only your name, the inheritance you received, though considered separate property, may be considered marital due to your actions.

One spouse has a significant amount of debt

If your future spouse has a significant amount of debt, such as student debt, you might want to get a prenup. Although debt prior to the marriage is considered separate debt, any property and income acquired during marriage is considered marital property in New York. Thus, if you are the higher income earner, in the event of divorce, your spouse will own half of what you both have accumulated during the marriage which can answer for his separate debt. If you want to make sure that your money is not used to pay for someone else’s debt, you need a prenup.

The drafting process — timing, disclosure, and best practices

The most enforceable prenuptial agreements in New York are not rushed. The Court of Appeals has repeatedly upheld prenups that were the product of arm's-length negotiation between represented parties, and has set aside agreements that bear the hallmarks of one-sided pressure. To put a prenup on the strongest possible footing, the following steps are typical:

• Start early. A prenup signed the day before the wedding is not automatically invalid, but it invites a duress challenge. Beginning discussions several months before the wedding leaves room for negotiation and for either party to walk away from the engagement if the terms cannot be agreed upon.
• Separate counsel. Each future spouse should have their own attorney. New York does not require independent counsel for validity, but agreements signed by an unrepresented spouse — particularly one with limited assets or English-language ability — face stiffer scrutiny.
• Full financial disclosure. Each party should provide a sworn statement of net worth or a detailed schedule of assets, liabilities, and income, attached to the agreement. Many successful challenges to prenups rest on a failure to disclose, or affirmative misrepresentation of, assets.
• Acknowledgment in proper form. The Domestic Relations Law requires that a prenuptial agreement be in writing, signed by both parties, and acknowledged or proved in the manner required to entitle a deed to be recorded. Defective acknowledgments — wrong wording, missing notary credentials, or out-of-state notaries lacking a certificate of conformity — have been used to invalidate agreements years later.
• Plain-English explanations. The agreement should clearly explain what each party is giving up. Generic boilerplate without explanation invites later argument that the parties did not understand the rights they waived.

What a New York prenup typically cannot do

A prenup is a powerful planning tool, but it has limits. Provisions that try to override certain rules of New York family law are typically unenforceable:

• Child support cannot be bargained away. Child support belongs to the child. A waiver of child support, or a fixed cap below the guideline amount under the Child Support Standards Act, is not binding on the court. A court can always set support in accordance with the child's best interests and the statutory formula.
• Child custody and parenting time are subject to a best-interests review. Parents can express preferences in a prenup, but the court has the final word at the time of any actual divorce.
• Provisions encouraging divorce are disfavored. Provisions that financially reward one party only if the marriage ends, or that operate as a "divorce bounty," may be struck down.
• Lifestyle clauses are unevenly enforced. Provisions that purport to regulate personal behavior — weight, social media use, frequency of intimacy, and similar terms — are generally not enforceable in New York and can make the rest of the agreement look frivolous.
• Waivers of statutory rights must be clear. Waivers of the right of election under Estates, Powers and Trusts Law section 5-1.1A, of equitable distribution, or of spousal maintenance, must be expressed in clear and specific language. Courts will not read a general waiver to give up a specific statutory right.

Prenup, postnup, or no agreement at all?

Couples who do not sign a prenup before the wedding can still address many of the same issues in a postnuptial agreement, which is governed by the same statute and similar formalities. Postnups are subject to closer scrutiny than prenups because the parties are already married and may be relying on one another financially, but they are commonly used and routinely enforced in New York when properly drafted.

Couples who sign neither type of agreement are subject to the default rules of New York law — equitable distribution of marital property under the Domestic Relations Law, spousal maintenance based on statutory guidelines and a list of statutory factors, and child support under the Child Support Standards Act. Those defaults work fine for many couples. They work less well for couples with a closely held business, significant premarital assets, anticipated inheritance, prior children to protect, or a substantial income gap.

Frequently asked questions

How much does a New York prenup cost?

Costs vary widely based on complexity, the level of negotiation between counsel, and the value and types of assets involved. Simple agreements between two parties with limited assets can be relatively modest; agreements involving business interests, trust structures, or international assets can run substantially higher. Both sides typically pay their own counsel.

Does my fiancé need to know everything I own?

For the agreement to be defensible, yes. Full and fair disclosure is one of the touchstones of a valid prenup in New York. Hiding assets, undervaluing them, or omitting categories of income or property is one of the most common reasons agreements are challenged later.

Can a prenup be amended after the wedding?

Yes. The parties can sign a written, properly acknowledged amendment, or replace the prenup entirely with a postnuptial agreement. Many couples revisit their agreements after significant life events — a new business, a major inheritance, the birth of children, or a relocation.

Will a court enforce a prenup signed in another state?

Generally, New York courts will enforce out-of-state prenuptial agreements that were valid where signed, subject to public-policy limits. Choice-of-law clauses are common and often respected, but unenforceable provisions — such as those purporting to dictate child support — remain unenforceable in New York regardless of governing law.

When should I consult a lawyer?

As soon as a prenup is on the table. The most common drafting errors — late signing, no independent counsel, incomplete disclosure, defective acknowledgment — are also the ones most easily avoided with timely legal advice. A lawyer can also help you decide what really belongs in the agreement and what is better handled by separate estate planning.

If you are engaged to be married and have debt or property, you should discuss with your spouse these financial issues and consider what you can put in a prenup. Should you need assistance in drafting a prenup, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York, NY, Brooklyn, NY and Queens, NY. You can call us at 212-233-1233 or send us an email at [email protected].