Why Copying a Prenup from the Internet Could Be a Multi-Million Dollar Mistake in New York
Technology has infiltrated virtually every aspect of our lives including researching the most esoteric topics in seconds, managing our finances, transforming our dating world and sometimes ultimately matching us with our life partners. Therefore, it shouldn’t be surprising that couples turn to the internet when considering the drafting of their prenuptial agreements. A quick search for a ‘New York prenup template’ yields countless results, many of which appear professional and promise a legally binding agreement at a much lower cost than hiring an attorney.
However, in my experience as a family law attorney and family law litigator in New York, I have seen firsthand the problems people face later when they attempt to save money by taking prenuptial shortcuts. There is no question that copying your prenup from a template on the internet will save you money in the very short run but in the longer run, you may spend hundreds of thousands of dollars litigating what you believed to be your financial safety net. I can’t tell you how many times people have come in with prenups copied from the internet, only to find out that they weren’t signed properly, didn’t protect their assets and certainly didn’t ensure that they would be financially safe. While it may seem cost-effective initially, I have watched clients ultimately spend far more in litigation when their do-it-yourself prenup fails to meet New York’s stringent legal requirements. What appears to be a bargain can quickly turn into a costly, stressful situation.
The Notary Trap: Why Signing Isn’t Enough
The very first thing that I do when a prospective client brings me their prenuptial agreement is to turn to the back of the agreement. Why do I do that? Because one of the most common mistakes that a lay person will make when entering into a prenuptial agreement without legal guidance is the manner in which they signed the prenuptial agreement. New York law requires that a prenuptial agreement be ‘acknowledged’ in the same way as a real estate document. Many online templates include only a basic notary section, which does not satisfy this requirement.
Just read the Galetta v. Galetta case. The prenup itself was not the issue. Instead, the prenup was thrown out because the acknowledgement at the end of the agreement failed to include certain words. No one disputed that the couple’s signatures were valid but nonetheless because of missing words, the entire prenuptial agreement was set aside. The prenup simply didn’t meet the standard required under New York law. The deficiency couldn’t be fixed even with the notary’s subsequent affidavit. So, if your template misses this detail, your agreement may be worthless.
Understanding Complex Compensation Structures
Many of my clients are employed in fields such as finance, technology, or healthcare, where compensation structures are often complex and extend well beyond a simple salary. Stock options, bonuses, and other forms of deferred compensation are common, yet these assets are rarely adequately addressed by generic online templates.
If your agreement does not specifically identify your assets and delineate exactly how they should be divided, you are facing a significant risk that a New York Court will divide them in a manner that you did not intend. Assets that have taken years to earn and accumulate are not assets worth risking. Assets that you may have inherited due to your family’s hard work shouldn’t be placed at risk. A basic template is simply not equipped to address these complexities.
The Importance of Full Financial Disclosure
Transparency is a very important factor in New York. Omitting an overseas account, a business interest, or any significant detail can also place your prenuptial agreement at risk. Be transparent about your assets and your liabilities. In addition to protecting the validity of your prenuptial agreement, you should be entering your marital relationship with full transparency.
Most online forms provide only limited space to disclose your assets, which is insufficient if you have substantial holdings. It is essential to include clear, detailed lists and thorough explanations. The more specific and comprehensive your disclosures, the more difficult it becomes for anyone to challenge your prenuptial agreement in the future.
A Practical Approach: Combining HelloPrenup with Attorney Review
In my practice, I have worked with HelloPrenup and recognize the benefits that technology can offer, as well as the critical importance of a thorough legal review. While lengthy negotiations between attorneys may not always be necessary, foregoing professional guidance isn’t necessarily the best solution either.
A practical approach is to use HelloPrenup to organize your information and facilitate important financial discussions as a couple. Once you and your future spouse start discussing finances, you may find yourself discussing other topics as well. This is such an incredible opportunity to enter into your marriage on the right foot. Once you have a draft, bringing it to an experienced attorney allows your attorney to:
- Review the sections to make sure that they adhere to New York’s specific rules.
- Make sure high stakes assets, like stock options or business shares, are protected.
- Check all the signatures and notary details so your prenup will hold up if anyone challenges it.
Key Takeaway
A prenuptial agreement may be one of the most important documents you will ever sign. It is a road map for your financial future and your financial health. It is essential to have your agreement carefully reviewed by a professional to ensure it is enforceable in New York. Taking this step can provide peace of mind and help you avoid costly issues later on.
Lisa Zeiderman, Esq.
New York Divorce and Family Law Attorney