“A lot of people have asked me how short I am…Since my last divorce, I think I’m about $100,000 short!”
- Actor Mickey Rooney
With divorces on the rise in the United States and nearly half of all marriages ending in divorce, Prenuptial Agreements should be considered as a way to prevent the financial devastation caused by a protracted, costly divorce. While the decision to proceed with a Prenuptial Agreement is the first step, the second step
is working with an attorney to prepare a Prenuptial Agreement which will be enforced by the Court following the marriage’s dissolution. When drafting a Prenuptial Agreement, a few things to consider are:
- Written Form – The agreement must be in writing, as New York State law will not allow an oral Prenuptial Agreement to be enforced.
- Acknowledgement – The Agreement must contain special language allowing the parties signing the agreement to “acknowledge” the Agreement, which is the same language required for a Deed to be recorded in the State of New York. Both parties must sign the Agreement before a Notary Public who will complete the acknowledgement.
- Legal Representation – It is best if both parties obtain their own separate and independent attorneys to assist in the negotiation of the Agreement. Such attorneys should be located, selected and paid for by each respective party to ensure that the attorney is considered independent.
- Period of Review – To avoid future claims of duress and coercion—essentially that a party was forced to sign an agreement involuntarily—the Agreement should be negotiated and signed by the parties as far in advance of the marriage date as possible.
- Financial Disclosure – To avoid future claims of fraud or misrepresentation, the parties should consider including a summary the finances of each party within the Agreement, providing their respective incomes, assets, debts, and expenses, to provide a clear picture of what assets are pre-marital, what is being waived, and the reasonableness of the Agreement.
- 6. Fairness – While parties may be eager to have an Agreement provide nothing to a spouse in the event that they later divorce, it is suggested that efforts be taken to make the Agreement fair so that it is not later determined to be “unconscionable” by the Court, which could prevent the Agreement from being enforced. If significant financial disparity exists between the parties, some financial considerations may be provided to the spouse who has or is expected to have less funds, if and when, the marriage ends.
While this summary does not provide an exhaustive review of the issues to be addressed to ensure that a Prenuptial Agreement will be enforced by a Court if challenged, these are some of the main concerns that should be considered when drafting a Prenuptial Agreement. If you or a loved one is contemplating marriage, taking the time to consider the possibility of preparing a Prenuptial Agreement is the only financially responsible option. Even for those who have few assets prior to a marriage, a Prenuptial Agreement may be used to protect future earnings, future assets and potential future inheritance. Considering the odds that your marriage has a 50% chance of ending in divorce, is the risk worthwhile? When making that decision, think of Mickey Rooney and ask yourself, “Do I want to be left $100,000 short?”