Case Study: Prenuptial agreement

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Facts: When Fred married Alice he wanted to make sure that the payments he received from his $5 million trust fund did not become a marital asset.  The payments would occur before and during the marriage. As such, Fred and Alice entered into a prenup removing the trust fund and any appreciation of it during their marriage confirming that it was Fred’s separate property asset and not subject to New York’s marital asset distribution rules.

Action: During the divorce negotiations Alice sought a percentage of the payments Fred received from the $5M trust during the marriage.

Result: Fred kept all the money he received from the trust because it was specified as a separate property asset in the prenuptial agreement.

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