Pre Nuptuial Agreements
Pre Nuptuial Agreements for New York
Pre nuptial agreements or prenups are legal agreements signed by affianced couples, before getting married. They are viewed as contracts wherein individuals agree on the allocation of assets and custody of child, if opting for divorce in future.
Prenup contains description of several details such as sharing of property, which couples may buy during their course of marriage, alimony (in case of divorce), right on property if a spouse dies, incurred debts that they might take during marriage, community property and so on.
Individuals, who have prenuptial agreement, find it easy to get no fault divorce in New York. It avoids arguments in courts because couples specify in advance, about what they would get in case of divorce.
Sometimes, while writing a pre nuptial agreement, individuals agree that they do not want alimony. Other states may give up the alimony issue, while settling the no fault divorce. However, during the proceedings of no fault divorce, New York county court upholds the alimony right, even if prenup states that spouse does not want alimony. At times, New York county court may allow the partner to waive off the alimony amount.
Benefits of Having Pre Nuptial Agreement:
If an individual has a prenup and obtains no fault divorce, then the person (payer) does need not pay tax for alimony, property and child support. This is because the payee (receiver) spouse is going to receive all the benefits as child support, alimony and property settlement.
To achieve tax exemption in no fault divorce, individuals first need to furnish the pre nuptial agreement to local office of the New York county clerk. To qualify for the tax exemption, alimony payment in the no fault divorce needs to meet certain criteria as laid down by IRC Sec.71, which is applicable in New York.
The criterion includes:
- Spouse needs to make payment in cash
- Secondly, the payer cannot file for combined (spouse and own) tax returns and
- They need not live in the same house after no fault divorce.
The judge re-characterizes these properties, which do not meet such criteria, as child support amount or asset settlement.
However, the court verifies all details of pre nuptial agreements before granting a no fault divorce and settles the alimony. To determine whether both the parties inscribed the pre nuptial agreement voluntarily, most courts rule out the prenups, which are signed just one day before the marriage. Thus, individuals need to enter the prenup agreement few days before their marriage.
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