Tag Archive for: Matrimonial Attorney

Are You a Puppet in Your Own Prenup?

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In sync with the current day, age, and New York City demographic, I have been doing a substantial amount of prenuptial agreements. The underlying dynamics and personalities are critical defining variables. One such dynamic that has recently been popping up in a nearly extreme and cartoonish manner is the “Puppet In Their Own Prenup!” or “Where’s Waldo?!” scenarios. This is where one of the parties is AWOL from the entire negotiation and preparation process and the whole agreement is orchestrated on their behalf, typically by their family, family’s arsenal of attorneys, tax and financial strategists/planners, or just the party’s individual matrimonial attorney.   

The puppet in these cases often has never read the agreement for him- or herself and does not know the content or how much the agreement cost, as it was paid for by others, and simply blanket signs at the end of the process to formalize the agreement.

Needless to say, this is a lamentable practice, as it is an attorney’s responsibility to ensure the client read the agreement and understood its terms before executing. Even if the party’s parent bankrolled the agreement and was the one in direct contact with the prenup attorney, it is the marrying party signing the document who is the real client, a fact that should never be lost!  

A case in point was one where both clients were high net worth, but one significantly more so than the other, as the family owned multiple international businesses. The bride-to-be was a spirited, roll-up-her-sleeve and do-it-herself young woman. She became intimidated when she was presented with the prenup by a team of attorneys and tax experts whom her future father-in-law hired for the task; her fiancé was completely uninvolved in the process and did not know what was flying.

She came to me and we turned the situation around to one where she understood the prenup in its entirety, and we negotiated it to be favorable towards her. She felt more confident and emboldened by the process, and it ended up being a great experience for her. Her fiancé was never involved in the negotiations and did not know the content of the agreement; he did not particularly care about it. He was quite young and did not really grasp his own net worth, so the process was meaningless to him.

The main attorney on the groom’s side responsible for overseeing the prenup candidly admitted that he was so focused on pleasing the groom’s father, who had hired him, and his team of experts that he never paid much mind to the actual groom and reviewing the agreement with him. The groom was an after-thought, practically a guest at his own wedding.

Another case presented an attorney who handled the prenup as if she were personally negotiating her own prenup. The client was a puppet to her own attorney’s wishes. What the client really wanted was for her attorney to explain the various options she had in each situation, and to decide what was best for herself without her attorney supplanting her own personal wishes in the agreement.  

It is best practice to encourage clients to be active in their own prenups, so they can understand the process from beginning to end. It is critical to ensure that both signatories, the bride and groom, have read the agreement for themselves. In fact, my retainer agreement specifically states that part of my service is to ensure that each person involved understands the ramifications of the provisions in the agreement.

If you find yourself needing a prenup, don’t let yourself be a puppet!

Feel free to contact us with your prenuptial agreement related questions.

Cheryl Stein, Esq.
The Law and Mediation Offices of Cheryl Stein
745 Fifth Avenue, Suite 500
New York, NY 10151
Phone: (646) 884-2324
E-mail: cheryl@cherylsteinesq.com

When Love and Marriage Don’t Go Together like a Horse and Carriage….What’s Left?

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Marriage is inherently deemed an economic partnership, according to the law, and upon its dissolution, the accumulated assets and interests are to be distributed on the basis of the economic needs and circumstances of the parties.

Equitable distribution in New York is fact specific, and not a 50/50 split, like it is in the community property states, such as California, Arizona, Nevada, and Alaska. (There are 9 community property states in total.) Much is left to judicial discretion in this neck of the woods. Both parties contributions as spouse, parent, wage earner or homemaker are accounted for. The court possesses flexibility and elasticity to mold an appropriate decree, because what is fair and just in one circumstance may not be so in another.

With regards to equitable distribution, we look closely at that economic partnership, splitting interests when there are both direct and indirect contributions made to the titled spouse by the non-titled spouse. These details will oftentimes determine how much is allocated between the parties. If there were many direct or indirect contributions made by the non-titled spouse, that could give a lot of weight to how much is paid to the non-titled spouse in the equitable distribution payout.

Marriage is like being on the clock. It is “marriage time,” like punching in and out of work, with the punch-in time being the date of marriage and the punch-out time being the date of commencement of a divorce action for active assets, and date of trial for passive assets. When you sign up for marriage, your financial actions are accounted for, and there is to be a reckoning with your spouse. A large part of the marriage (contract) is a financial contract with your spouse, and whether or not you understand the provisions and their ramifications when you take those marriage vows, you are bound by them. All time you spend during the marriage may be accounted for and “billed,” so to speak, in the final pay-out equitable distribution awards.

Arguably, this result may be inherently unfair from the get-go if you consider that most people don’t read the Domestic Relations Law, Family Court Act, General Obligations Laws, enter into a prenuptial agreement, or consult with a matrimonial attorney prior to marriage, so they are clueless as to the full breadth of the financial picture and often make erroneous presumptions. For example, many people presume that money they put in their separate titled accounts during marriage is separate property, which is incorrect. All income earned during marriage is marital income, so if spouses put their incomes into separate titled accounts, rather than keeping that money separate, they are commingling their separate account and presumptively turning everything in that account into marital property – the exact opposite result they intended.

Another counterintuitive consequence and irony is that many people’s performance tanks during a bad marriage. A non-titled spouse may be requesting and entitled to equitable distribution for their contributions when the titled spouse may feel that all their spouse did during the phases of a distant or rocky marriage is hamper their performance and growth, and that their growth would have been exponentially greater without their spouse and his/her claimed contributions.

The hoi polloi are entering into marriage contracts without understanding the basic principles of the contract, and later claiming that they did not understand the contract is not a valid defense. If you are old enough to get married, you are supposedly mature and responsible enough to avail yourself of this information and plan your finances accordingly.

It would be a leap to evoke the phrase “The Follies of the Masses,” but as matrimonial attorneys and mediators, we urge people to educate themselves about managing their finances prior to marriage, and if that time has passed, much may still be salvaged. I have married people asking for consultations all the time to realign their finances and understand the financial blueprint, for example, prior to one spouse opening a business, assuming a large debt, receiving an inheritance or personal injury award or liquidating untainted premarital property towards purchasing a jointly titled home, all of which are opportune times.

Feel free to contact The Law & Mediation Offices of Cheryl Stein with any questions.

Cheryl Stein, Esq.
The Law and Mediation Offices of Cheryl Stein
745 Fifth Avenue, Suite 500
New York, NY 10151
Phone: (646) 884-2324
E-mail: cheryl@cherylsteinesq.com