On the subject of prenuptial agreements, the first question to ask your attorney is, “Do I need one?” Under the current law in my state (which is New York), in most cases an honest answer would be, “Probably not.” However, for various reasons, it’s not the answer you’re likely to hear. To be precise, there are a variety of special factors that can dictate that you should have one, even if you don’t absolutely need it.

When considering research, I am often reminded of the advice of a now-deceased former colleague (a pioneer in our field on behalf of women’s rights in divorce). When approached by a high-level potential client, a successful businesswoman who wanted to know if she “needed a prenup,” my colleague paid no attention to the client’s candid explanation of the financial complexities and personal emotional factors of her marriage. situation. Instead, she narrowed the inquiry down to a single question: “Who has more money, him or you?”

When told that the husband-to-be was undoubtedly the richer party, my colleague said, as if reciting one of the Ten Commandments, “Well, then you certainly don’t need one. And don’t you dare say a word about giving it to your fiancé.” Don’t even mention the word prenup!”

Some other factors to consider that militate in favor of a prenuptial agreement are:

(1) You want or need to provide for people other than your spouse in your estate plan. This could include parents, siblings, children from a previous marriage, even charity. If you do not provide this, under New York law, your spouse will have the right to choose to take up to one-third of your estate, regardless of what your will says (a right known as the “right of spousal choice”). “). And, if you die without a will (the legal term is “intestate”), your spouse may be entitled to an even larger share.

(2) You own an asset jointly with others that you do not want or cannot share with your future spouse in the event of divorce. Under the New York system for dividing marital property in divorce (known as equitable distribution), whether or not title to premarital property is held jointly with a third party, your spouse may be entitled to share your appreciation (or even the full value, when the property has been so “mixed” with the marital property that it is considered indistinguishable).

(3) You trust that your future spouse will not marry you for your money, but you still find it necessary to test that trust. Most prenuptial agreements provide that all jointly titled property will be shared equally in the event of a divorce; therefore, after your spouse gains your trust, you can, if you wish, choose to take a more cohesive and sharing approach. A less common provision that is sometimes proposed by the party with less money is a “sunset provision,” which means that after a certain number of years of marriage, the entire prenup becomes null and void. I’ve never been comfortable with this concept, which seems to me like a built-in incentive for one party to initiate divorce proceedings before the “sunset” date.

(4) For other reasons, you want or need to establish a mechanism to share future living expenses with your future spouse. An example might be when one spouse can afford to make an initial investment in an asset such as a home or business, and the other has more available monthly cash flow. On the other hand, the true usefulness of this type of provision is questionable; it is hard to imagine one spouse taking legal action to enforce this type of provision against the other without triggering divorce proceedings.

(5) You anticipate making a significant joint investment, in the very near future, for example, a marital residence, and want to address, in advance, your respective rights to share in any increase, how you will allocate responsibility for maintaining it, etc. . If you want to provide that, in the event of divorce, the estate be divided proportionally (according to your respective contributions), instead of 50/50, now is the time to do so. In addition, pre-establishing a mechanism to share common expenses, during your marriage, can serve to reduce tensions, or allow one or both of you to commit more enthusiastically to the purchase.

(6) You have your own business and neither you nor your business associates want your future spouse to acquire a share in it. Under New York divorce law, your prenuptial business, or at least your marital appreciation, may be a marital asset subject to valuation and distribution. No judge will force you to sell your business, particularly if it is your main source of income, and certainly not require you to accept your future spouse as a business partner, but rather cash awards, determined by an appraisal of your business being routinely performed. . This can be particularly problematic when your business is not, or is not easy to sell, such as with a minority interest in a closely held corporation, limited partnership interest, or interest in a professional practice.

(7) More specifically, you have, or anticipate having, your own professional practice and do not want your spouse to acquire an interest in it. While many companies can be valued by reference to comparable company sales, professional practices generally cannot and are therefore valued in accordance with established accounting conventions. This can result in appraisal values ​​as high as seven figures, where the gains are substantial. Also, since there are typically no assets to sell to generate the court-awarded payment, the payer typically ends up paying the award out of the same proceeds that have been valued.

(8) You are taking or could take a course of study, take an exam, etc., that will lead to a degree, certification, license, or the like, and you do not want to risk having to pay your future spouse. for a portion of its intangible value. If such intangible assets were acquired in whole or in part during the marriage, the resulting enhancement in earnings will generally be valued over the holder’s working life as an actuary. Again, when it comes to substantial income, the value can easily go as high as seven figures. And, a professional practice, degree, certification, license, or the like, certainly cannot be sold to generate the funds necessary to pay for such an award.

(9) You are involved in a business or occupation where opening your books or disclosing your finances in the event of a divorce is a far from attractive prospect. There is liberal financial disclosure in divorce proceedings in New York, which means that anything within reason that affects income or assets is fair game. Enough talk.

(10) And last but not least, what for some may be the biggest motivating factor, the desire not to have to pay divorce attorney fees that could be large enough to eat up a substantial portion of your hard-earned goods. Divorce litigation can be extremely expensive. If that’s not enough of a concern, consider that you may have to pay not only your own fees, but also your spouse’s legal fees, if he or she is the financially dependent party. Pre-establishing your financial rights, pursuant to a prenuptial agreement, is one way to avoid costly litigation over financial matters, but keep in mind that issues involving children cannot be legally resolved through a prenuptial agreement.

I am sure that any of my colleagues could point to ten or more significant reasons that I have omitted. However, if none of the 10 reasons above apply to you and you are not substantially wealthier than your future spouse, you may be one of those lucky few who can avoid the often painful (always unromantic) process of negotiating a prenup. on the eve of their wedding.