Prenuptial agreements commonly make headlines as celebrities getting hitched try to protect their fortunes. But the focus on celebrities (or the ultra-rich) is misleading. In reality, average Americans should, and frequently do, make use of the benefits of prenuptial agreements. In our area, New York estate planning attorneys know that these agreements are an important part of one's long-term planning, particularly in the event of late-in-life or second marriages. These agreements allow for an individual to prepare and protect themselves and their families. But the creation of these legal documents is not without some pitfalls.
A prenuptial agreement is essentially a contract between two people planning to get married. They agree prior to marriage on how they will divide their assets if they are divorced and on any number of other issues. While this process can be emotional, especially because the couples are naturally optimistic and excited about their future, forming this agreement while everyone still cares for each other and wants the best for each other is always the preferred model. If the good feelings should disappear, this agreement allows a couple to separate as fairly and painlessly as possible.
One Common Challenge
In today's global world it is more and more common for couples who live in different states to meet and make plans for marriage. Often the laws for prenuptial agreements vary between the two states. Writing the prenuptial agreement for these couples is proving to be challenging for their lawyers who have to find a way to make the agreement valid despite significant differences in the law.
To overcome some of the difficulties, the Uniform Law Commission has begun drafting model laws that they hope all states will eventually adopt. This Commission is comprised of lawyers, judges, legislatures and law professors. Right now, it is quite a complex process for different-state couples to create agreements. The Commission's hope is that once states have similar laws, the process will be more straightforward.
On top of that, the Commission wants to make the laws for prenuptial agreements fairer. One example is ensuring the law has provisions to prevent one party from having greater bargaining power. A common example of this is a wealthy spouse pressuring his fiancé to sign an agreement preventing him or her from receiving any of his assets if they divorce. Unfair agreements such as this are not the intent of prenuptial laws, and the Commission hopes to prevent such agreements. With different fairness precedents and rules in different states it is often not easy to draft agreements that will be upheld in different locations.
The bottom line, however, is clear: no matter what your situation, it is prudent to seek legal help on these sorts of issues when preparing for marriage. It not only protects assets, but these agreements protect both spouses from the chaos and frustration of a divorce, should that happen.
In our area, be sure to get in touch with a New York estate planning lawyer for advice on how a marriage might affect long term property, inheritance, and elder law issues.
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