Many New Yorkers believe in the power of the “prenup,” or prenuptial agreement, formally known as an antenuptial agreement here. It’s researched and agreed to, then signed, to protect both parties against the unfortunate possibility of a divorce later on. (A post-nuptial agreement is the same thing but written after the date of a marriage.) A couple makes decisions with a clear head and in advance, not during an emotionally charged period when they are dissolving a partnership.

For the couple who endures the test of time, writing their wills as a part of an overall estate plan becomes an important task. A will offers guidance and direction for the surviving spouse and any children, and may also name a guardian if the children are minors.

But if these documents have conflicting information, a surviving spouse could have trouble when the other spouse passes away.

What’s The Difference?

A prenup is intended to pre-plan for the possibility of divorce as well as the death of one party. Part of the prenup determines the disposition of “separate” property, or anything that one party owned prior to the marriage. Separate property, such as a house owned by one spouse, would not be part of a property division in a divorce, even if it was used as a marital home.

The will specifically pre-plans for a person’s death, and the distribution of the decedent’s assets and property.

Sometimes, the two documents conflict, causing additional problems for the beneficiaries. Depending on the circumstances, the will may take precedence over the prenup.

A Valid Prenup

Preparation is important when creating a prenup to ensure that it’s done correctly and does not contain clauses that render it invalid.

A prenup may be invalid for a number of reasons:

• If a court rules the prenup as “unenforceable,” because it is unfair to one of the parties or one party was coerced into agreeing to it
• It contains clauses that are illegal (i.e., waiving rights to Medicare or Social Security benefits)
• The prenup contains a “sunset clause,” meaning it expires at a specific point in time (such as a date in the future, i.e., particular wedding anniversary)
• Clauses that greatly benefit one party over the other, such as the higher earner absolved from supporting the lower-earning spouse

A probate judge will have to decide if the prenup should be followed. Should the prenup be declared invalid for any reason, the terms of the will are automatically activated.

The Will

New York requires a current spouse to receive an “elective share” of the deceased’s estate, regardless of what the will says. That elective share will depend on the size of the estate, but is usually one-third or one-half of what’s probated. Anything that is transferred outside of the probate proceeding is also included in the share.

If a person dies in New York without a will, then the probate court decides on property division according to state intestancy laws. The prenup can then used to distribute the estate as a will would have. This can also be the case if a will is found to be invalid. 

Additionally, should a couple be in the middle of divorce proceedings, that process cancels and the parties return to being just “married” for the sake of probate. This means that the surviving spouse would be entitled to an elective share unless the estate can prove “abandonment” or other grounds for refusing a share.

A spouse can be disinherited if there is a properly executed prenup in place at the time of death that specifically excludes him or her from an inheritance. The excluded spouse must also agree to be disinherited. In some cases, it may be up to the probate court to decide which document should be used. 

Regular Reviews

This also happens occasionally: many years after a couple divorces, one never updated their will or other estate documents and beneficiary forms, then dies. Suddenly, the former spouse becomes a party to the probate of their former spouse’s will, possibly inheriting assets.

In the absence of a prenup, the will takes precedence. Left unchecked, this can lead to a former spouse as a beneficiary—and create a conflict with a current spouse, children, or others who believed they would receive something. Under New York’s elective share laws, a current spouse still inherits, even though a former spouse may also be a beneficiary.

Estate planning attorneys always advise clients to review their estate plans every three to five years and update as needed. Marriage, divorce, remarriage, new children, and grandchildren can lead to relatives contesting an improperly written will. Changes in state laws can also radically alter the plan that was previously favorable.

An estate plan review should include all beneficiary designations that may have been overlooked after a divorce including:

• Bank accounts
• Brokerage accounts
• Retirement accounts such as IRAs and 401(k) plans
• Real estate
• Life insurance policies
• Trusts
• Other estate assets to be distributed

Otherwise, a prenuptial agreement may be used in place of a missing will. Worse, New York state intestancy laws may decide how to distribute your estate, and it may not be in line with what you wanted.

Prenuptial Agreements  For New York Residents

At the Law Offices of Stacy Sabatini, Esq., we specialize in family law representation for New York residents in Rockland, Orange, and Westchester counties. If you and your partner are considering whether a prenuptial agreement might be right for you, please contact our office online by filling out our online form or call (845) 243-0295  to schedule your consultation at our New City, New York office. We are happy to speak with you about a “prenup” and how it can benefit you now and in the future.