Over the last few months, you may have heard about certain high-profile celebrity divorce actions where the couples did not have a prenuptial agreement in place. Due to the laws of California and Washington state, where most of these divorces were filed, the reality of these cases is that there will be a lot of money and property being distributed evenly as “community property.”
Community Property vs. Equitable Distribution
There are two major points that need to be made regarding the divorces of Jeff Bezos, Wendy Williams, and Adele: 1 – the importance of a prenuptial agreement, even with couples that do not have the money and assets of celebrities and dot-com CEOs, cannot be overstated; 2 – while we hear about money being split evenly when it comes to these high-profile divorces, the law in New York is different than the laws in California and Washington.
In New York, the law governing the distribution of assets is based on “equitable distribution,” not “community property.” What’s the difference? In community property states, any money or assets that are accumulated during the marriage are assumed to belong to each spouse equally. Therefore, in the absence of a prenuptial or even a postnuptial agreement, all of these assets are divided evenly between both spouses.
Of course, there are exceptions to this law, including certain assets that each person held prior to the marriage, and property that one spouse received as a gift or through inheritance. In order to keep such property classified as non-marital property, the spouse must keep it apart from their marital or community property. Otherwise, that property may also be considered marital property and subject to community property laws, as is the case with commingled property in the state of New York. Community property is the law in Alaska (by agreement), Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
In New York, as in most states of the union, the law is based on equitable distribution. This means that when working through the division of assets during a divorce, property is not necessarily divided equally, but equitably. The guideline is “fair and equitable.” In equitable distribution states, the court will take a number of factors into account before making a determination, such as the relative incomes of each spouse and the duration of their marriage.
The court will also put a value on other variables, including:
- Was one spouse financially supported while they completed their education to enhance their individual earning potential?
- Did one spouse put their career on hold – sacrificing education, advancement, and greater earning capacities – to stay at home and take care of any children and the household?
The Benefits of a Prenuptial Agreement
Regardless of the laws governing the distribution of assets, the major lesson in watching these three divorces play out is that every couple – no matter how much property they own or how much money they have in the bank – should get a prenuptial agreement.
When you are starting out, money is very tight. The purpose behind saving money may seem as elusive to you as buying a home or starting a family. But even in this building phase of life, you need to start saving for the future. Your job may offer a 401K, 403B, or another retirement plan option. As you progress through life and your career, you might not even realize that thanks to the occasional raise or promotion that your assets have started to accumulate. Having a prenuptial agreement in place becomes more important as time goes on and your property and assets continue to grow.
In planning your future, you always have to prepare for, as Dickens wrote, “the worst of times.” At some point, we all need to come to terms with our mortality and plan for those “final expenses.” No one likes to think about it, but it’s an important part of planning your life. It is only fair to plan for the inevitable and not place extra burdens on the loved ones you leave behind.
The end of your marriage is not a definite conclusion. During the honeymoon phase, the idea that your marriage could end in divorce is inconceivable. Unfortunately, there is a certain truth related to marriage: a good portion of marriages will fail and end in divorce. Planning for this possibility is not only the smart thing to do for yourself, but it’s also beneficial to your spouse. A prenuptial agreement can alleviate quite a bit of the negotiation and uncertainty that comes with a divorce action. Having a plan in place can circumvent potential animosity and protect your children from the stress of a long and drawn-out battle.
Ready to Negotiate a Marital Agreement? Schedule a Consultation Today
Some of the media headlines being reported today – including the divorces of Jeff Bezos, Wendy Williams, and Adele – can serve as valuable lessons for the average American. Prenuptial and postnuptial agreements aren’t just for the wealthy or romantically disinclined. These helpful contracts can streamline the divorce process by facilitating communication and reducing or eliminating potential conflicts related to asset distribution.
Contact the Nassau County marital agreements lawyer at the Law Offices of Anthony J. LoPresti, if you’re ready to develop, modify, or update a prenuptial or postnuptial agreement. Our compassionate legal representative can review your case, represent your interests, and help you negotiate a contract that reflects your personal and financial needs.
Rely on top-quality legal counsel today. Contact the Law Offices of Anthony J. LoPresti at (516) 252-0223 to schedule a free consultation.