The Pros of a Prenuptial Agreement Far Outweigh the Cons

We’re seeing more couples, especially high-net-worth couples, opting for prenuptial agreements than in the past. And, many spouses contemplating getting a divorce often confess that they wish they had entered into a prenuptial agreement with their current spouse.

As people are getting married later in life and are bringing more assets and income into a marriage, they are beginning to see how critical a prenuptial agreement can be.

While there are pros and cons to entering into a prenuptial agreement governed by New York law, the pros far outweigh the cons. When you hire an experienced attorney to help you draft and negotiate a prenuptial agreement, you can realize the benefits while minimizing some of the potential drawbacks.

The Pros of a Prenuptial Agreement

The most obvious benefit of a prenuptial agreement is that it protects your wealth and your standard of living if you were to get divorced.

New York uses principles of equitable distribution to divide marital assets. A prenuptial agreement can take certain assets out of the pool that would otherwise be considered by a court for division in a divorce. The agreement can also specify how certain assets are to be split. Provided the agreement is properly entered into, its terms would then be enforced in connection with a divorce. Whether you have assets or business interests, or both, a prenuptial agreement can protect those assets and interests.

A prenuptial agreement can also keep you from ending a marriage in debt. If your spouse takes on debt during the marriage, it can become partially yours. The prenuptial agreement can take certain debts out of the marital estate ahead of time. For example, if your spouse takes out certain kinds of loans during the marriage, you may be obligated to pay them without a prenuptial agreement.

On the other end of the spectrum, a prenuptial agreement can help secure your future after a divorce. People often speak of prenuptial agreements in terms of protection, but protection goes both ways. A prenuptial agreement can ensure that the “non-monied” spouse receives or retains a certain amount of assets in a divorce, which can help them maintain the standard of living they had while married.

The Potential Cons of a Prenuptial Agreement

In New York, the public policy of the State is to enforce contracts parties enter into, including prenuptial agreements. As a result, a prenuptial agreement voluntarily entered into and properly executed will likely be enforceable, even if in hindsight you no longer are happy with the agreement you entered into.

Absent establishing that an agreement is unconscionable (that it literally shocks the conscience of the court) or the presence of fraud, duress, or coercion (difficult standards to meet under New York law), a New York court will rarely set aside a prenuptial agreement.

To avoid a situation where you are forced to enter into a prenuptial agreement that you think is unfair, you should have an attorney representing you who has experience negotiating prenuptial agreements. You cannot sign an unfair prenuptial agreement and assume it’s not going to be enforced.

Another aspect of prenuptial agreements that people find problematic is that it can be difficult to discuss financial issues and negotiate about money with a future spouse before tying the knot,   preferring not to “get into the weeds” about financial matters prior to their wedding. Doing so may cause tension between the future spouses and potentially lead to conflict between the future spouses and their families. The end result could be distrust and negative emotions before any wedding vows are exchanged.

Similarly, some future spouses may not want to plan for a potential divorce before they get married. They, or their families, may have an older—and outdated—view that prenuptial agreements carry a negative stigma and that the existence of an agreement must mean a marriage is doomed to fail.

However, more and more prospective spouses are opting for a prenuptial agreement as this stigma becomes a thing of the past and they (and their families) understand that prenuptial agreements are prudent tools for financial and estate planning. And, given that prenuptial agreements are “made to order” and not “cookie-cutter” documents, when spouses work with their own attorneys to negotiate and draft a prenuptial agreement, they can avoid having to directly address certain elements of the agreement with their future spouses if it would be uncomfortable to do so or an issue/area that they do not want the agreement to cover.

If you are bringing significant income and/or assets into a marriage, are a business owner, or the beneficiary or potential beneficiary of future family wealth, or if you would just like to ensure some semblance of financial certainty in the event of a divorce, you should strongly consider a prenuptial agreement.

At Mosberg Sharma Stambleck Gross, we know how to leverage our experience to find creative solutions to our clients’ difficult divorce issues, including helping them negotiate a prenuptial agreement that provides the protection and security they’re looking for.

Call us today at 212-678-8500 to learn more about how we may be able to help you with your
family or matrimonial law issues.