As you prepare to walk down the aisle, you could not be more excited about living life with your significant other. At the same time, you already own a few assets, and you wonder what will happen to them down the road if your marriage does not work out for one reason or another.
Before you get married, it might be a wise move to create a prenuptial agreement (prenup) with your soon-to-be spouse, as this may help you to protect your separate assets. Here is a look at how prenups work in New York and whether it may behoove you to draft one.
Reasons to create a prenup
If you have separate assets prior to getting married, creating a prenup is a wise move because it will allow you to document this property as yours alone. Doing so will prevent you from having to split this property with the other party in the event that you get divorced.
A prenup may also be helpful for spelling out what exactly your marital property is, which the court must divide equitably during the divorce process. You can also use this type of agreement to assign debt, like credit card debt or a student loan, to the proper spouse. All in all, prenups can help to decrease conflict during the divorce process.
Reasons a prenup might not work for you
Creating a prenup might not be a viable option if you and your future spouse are not on the same page regarding this. For example, perhaps the other party is worried that discussing your chances of getting a divorce or the distribution of property will harm your relationship.
If this is the case, you may want to wait until after you have gotten married to put together a contract called a postnuptial agreement. This agreement is similar to a prenup in that it spells out how you will handle assets and liabilities during a possible divorce situation in the future, but it is drafted and signed after the marriage instead of before.
Your rights when creating a prenup
As a general rule of thumb, it is smart to put together a prenup if you own real property, own assets totaling over $50,000 or earn six figures per year. This type of agreement is also ideal for those who own a business, who have substantial retirement benefits or have children from a prior relationship. In these situations, your attorney can work with you to create an agreement that protects your rights and best interests given your unique situation.