Every year, over 2 million people get married in the United States. In the same year, almost 900,000 people get divorced. Broken down even further, approximately 50% of all first marriages, 67% of all second marriages, and 74% of all third marriages end in divorce. With these statistics, it should be of little surprise that the use of prenuptial agreements is on the rise. However, one surprise may be that more agreements are being requested by women.
In New York, the state statutes have little to say about prenuptial agreements. Section 3-303 merely says, “A contract made between persons in contemplation of marriage, remains in full force after the marriage takes place.” This is because prenuptial agreements, by their nature, are highly customized and tailored to the couple who is entering into it.
In general, a valid prenuptial agreement requires the following–
In order to be valid, each person entering into the prenuptial must do so of his or her own free will and must not be coerced into signing the agreement. The circumstances surrounding the negotiation and signing of the agreement need to be free from duress, overreaching, or coercion.
Valid prenuptial agreements require full disclosure of each person’s financial assets and liabilities. This includes disclosure of financial statements for bank accounts, investment accounts, real estate holdings, business interests, vehicles, and other assets, as well as disclosure of liabilities, including outstanding loans, mortgages, and other debts.
Independent counsel means that each person to the agreement should have his or her own attorney, rather than sharing an attorney or being required to use one that is being supplied by the other person.
The fairness provision is subjective. In general, a prenuptial agreement does not have to be equal, but it must not be so disproportionate, or call for one party to give up so much in the event of a divorce, that the agreement is considered unconscionable.
In New York, a prenuptial agreement must be properly acknowledged or witnessed. Proper acknowledgement serves to prove the identity of the people signing the agreement and it adds formality to the situation to encourage careful reflection and prevent hasty decision-making regarding execution.
If you have questions about how these agreements are crafted or how an agreement may fit into your long-term planning, be sure to contact a New York estate planning attorney today for tailored guidance.