If it is your intention to get married, and you have assets, you may wish to consider entering into a pre-nuptial agreement. The purpose of the agreement is to establish your rights and responsibilities after marriage. If you do not enter into such an agreement, then you will be subject to the Matrimonial Property Act in dividing your property, and the court will determine how much spousal support should be paid , if any.
The Matrimonial Property Act says that it is presumed that matrimonial property will be shared equally. Matrimonial Property is defined as assets accumulated after marriage, and the increase in value of any assets owned at the date of marriage. Any property owned at the date of marriage is deemed to be exempt, as are certain assets acquired after marriage, such as inheritances. If you own assets and intend to get married, you may wish to have an agreement specifically exempting your existing assets from the matrimonial property division. The Matrimonial Property Act does exempt existing assets from property division but it includes any increase in the value of such assets. Many people want to segregate their existing assets, and the increase in their value, from the property division scheme.
You may also want to establish certain guidelines for the payment of spousal support after marriage. The courts have a number of rules that they apply to determine how much spousal support should be paid, but some people want to establish their own structure. This might be especially the case if you have children from a first marriage, or you are marrying someone with no assets, or a lot of debt.
It is crucial to remember that it is not only the agreement itself that is important, but how you deal with your financial affairs after the agreement is executed. If you agree that certain of your assets should not be treated as matrimonial property, but then you take those exempt assets and mingle them with your other matrimonial property, you may lose your exemption. For example, let’s say that when you get married you have a stock portfolio worth $100,000. If, after marriage, you collapse that stock portfolio and use the money for a downpayment on a house you buy with your spouse, you probably lose some or all of your exemption in the stock portfolio. You can easily protect against such a problem by getting a subsequent acknowledgement from your spouse recognizing the continuance of the exemption, but you have to remember to do it. The bottom line is, no matter how good your agreement, if you do not structure your financial affairs in accordance with its terms, you risk losing the protection afforded by the agreement.
The cost of preparing and executing the agreement will vary depending upon the complexity of your affairs. Our fee will start at $1,000. Many times we can prepare the agreement, arrange for independent legal advice, and execute the documents for this fee. There will be an additional fee for the other lawyer to give independent legal advice. We can’t control this fee, but if the agreement is straight forward it is usually possible to find a lawyer who will do it for less than $500.
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