Marriage is romantic, but it also has a practical side. This is why many clients choose to enter into a prenuptial agreement upon marriage. The true benefit of a prenuptial agreement is that it allows the parties to maintain control over their assets and finances, rather than allowing new york state law to dictate their future.
Typically a prenuptial agreement covers how to divide finances and assets should the marriage break down.
According to Domestic Relations Law section 236B (1)(c), marital property is all property that is acquired by the parties between the date of marriage and before the execution of a separation agreement or the date of the commencement of a matrimonial action, with three exceptions. Gifts from third parties (not inter spousal gifts), proceeds acquired from a personal injuries case, and inheritance received are deemed to be separate property. However, Domestic Relations law section 236B(1)(d)(3) states that the appreciation, or increase in value, of separate property remains separate except to the extent that such appreciation is due in part to the contributions or efforts of the other spouse. Case law interpreting the statute has made it clear that where the value of a spouse's asset has increased during the marriage due to the contributions of the other spouse, that appreciation is a marital asset to be divided.
A pre-nuptial agreement can help protect assets where one or both of the parties have children from a prior marriage or relationship. An Pre-nuptial agreement can also dictate the inheritance rights of the other spouse, which may differ from New York State law which may help protect children from a prior marriage or relationship. A prenuptial agreement can dictate how much of the appreciation of a separate property asset the other spouse is entitled to, and can dictate future
To learn more about how a pre-nuptial agreement can benefit you, contact our office today.