BY RONALD A. FATOULLAH, Esq. and YAN LIAN KUANG-MAOGA, Esq.
As more and more people marry more than once and later in life, prenuptial agreements have become an important estate planning tool. Such agreements are especially helpful if you have children from a previous marriage or important heirlooms that you want to keep on your side of the family.
They are also good for business owners who want to ensure that their business stays intact in the event that their interest in the business is subject to a claim in a divorce or an estate.
Prenuptial agreements are generally associated with the distribution of assets between spouses in the event of a divorce. But don’t forget that prenuptial agreements can also control the distribution of assets in the event of the death of either spouse.
Without a prenuptial agreement (or, in New York, a marital agreement validly executed during the marriage), your new spouse may be able to invalidate your existing estate plan. New York protects a surviving spouse by allowing such spouse a right to a share of the estate of the deceased spouse, regardless of what the deceased spouse may have directed under his or her will or whom he or she had designated as beneficiaries of his or her accounts or even in trust. However, this right may be waived or released through a prenuptial agreement or a marital agreement.
A prenuptial agreement can be used in a second marriage when both parties have children. For example, suppose you get remarried and both you and your spouse have children from a prior marriage. You want your house to pass to your children, but without proper planning and an agreement in place, your spouse could inherit the house and then pass the house to your spouse’s children when he or she dies.
It is important to make sure your prenuptial agreement will protect you and that it is valid. The following are the major factors needed to ensure this:
? In writing. To be valid, a prenuptial agreement must be in writing and signed by both spouses. A court will not enforce a verbal agreement.
? No pressure. A prenuptial agreement will be invalid if one spouse is pressured into signing it by the other spouse.
? Reading. Both spouses must read and understand the agreement. Both spouses must be given time to read the document and consider it before signing it.
? Truthful. Both spouses must fully disclose all of their assets and liabilities. If either spouse lies or omits information about his or her finances, the agreement can be invalidated.
? No invalid provisions. While spouses can agree to most financial arrangements, a prenuptial agreement that modifies child support obligations is illegal. If an agreement contains an invalid provision, the court can either throw out the entire agreement or strike the invalid provision. Similarly, if the terms of the agreement are grossly unfair to one spouse, the agreement may be invalidated.
? Independent counsel. Regardless of whether it is required by state law to seek advice from separate attorneys before signing a prenuptial agreement, it is always best to make sure that each spouse has his/her own attorney and that his/her interest is protected.
Ronald Fatoullah is a leading expert in the field of elder law. He is the founder and managing attorney of Ronald Fatoullah & Associates, a law firm concentrating in elder law, Medicaid eligibility, estate planning, special needs, trusts, guardianships, & probate. He is certified as an elder law attorney by the National Elder Law Foundation, and he is the current Legal Committee Chair of the Long Island Alzheimer’s Association. This article was written with the assistance of Lian Kuang, Esq. an attorney with the firm. Kuang is fluent in Mandarin and Cantonese and assists our Chinese speaking clients. The firm’s offices are conveniently located in: Queens, Long Island, Manhattan & Brooklyn and can be reached at: 718-261.1700 or 516-466-4422, or Toll Free at: 1-877-ELDER LAW or 1-877-ESTATES.
