The sunset provision, or sometimes referred to, as the sunset clause, is a legal term that you’ve never heard of? If you’re not a prenuptial agreement lawyer, that may be true, but you may need to know what it is, especially when we are talking about prenuptial agreements. Why? Because if you already have a prenuptial agreement, you may actually have one, and not realize it! That’s right. If you have a prenuptial agreement, and the terms and conditions are not facts with which you are very familiar, or it was drawn up many years ago and a lot has happened since then and you forgot what you agreed to, you may need to know what it means. It is essentially a date after which a prenuptial agreement can ‘expire’. Yes, your prenuptial agreement may become null and void after 30 years, let’s say, and so since 2017 you haven’t even really had a prenup, and thought you did.
Don’t fret; New York Prenup can assist you by revisiting your New York prenup document and ensuring that you are both still protected, and that you are covered in such a way that is relevant to the current status of your assets.
We have suggested to clients that they can basically create the terms and conditions of their prenuptial agreement, finalize the document, put it away for safe keeping, and then basically all but forget about it. We still think that is a good course of action! However, there are certain circumstances in which we recommend that if you have a prenuptial agreement that was drafted awhile back and are unfamiliar with the terms off the top of your head at present, you may want to take a peek. You’re going to want to make sure there aren’t provisions in the document that you and your spouse agreed to say, 15 or 20 years ago but that are not applicable now. Perhaps financial circumstances of one or both parties have significantly changed, and the original prenup did not address these situations.
Now to the sunset clause. This term is often either unheard of, or misunderstood. It is also applied in a widely generic manner to cover several different types of provisions in prenuptial agreements, but as we described above it is used generally to refer to a prenup that, at some predetermined date/amount of time married, the prenup expires. In other scenarios, the sunset provision may indicate that should the marriage remain intact for a certain amount of time, say 25 years, then one spouse may be entitled to a greater amount of assets than if the marriage were to have dissolved during that 25 year period.
‘Sunset provisions’ in a prenuptial agreement can frequently be found in prenups where one of the parties is significantly wealthier than the other when entering into the marriage. Having a large amount of assets in retirement accounts, let’s say, or real estate holdings, may prompt a couple to seek a sort of sunset clause in their agreement. On top of that, if there are children for one or both spouses from a prior marriage, it is not uncommon to see a sunset provision that would protect the assets of those children, and then that clause would be set to expire, perhaps, when those children become adults.
These sort of situations make it a good idea to set a sort of timer whereby the couple revisits the agreement and decides if there are amendments that need to be made, or perhaps you feel the verbiage is too loose, confusing or inapplicable in the current circumstances of the marriage, and it may be a good time to consult with New York Prenup attorneys and have a new prenuptial agreement (also known as a postnuptial agreement) drawn up.
Things change during marriages, including when it comes to wealth, income, assets, and inheritance. In a short amount of time, one spouse can come into significant money or a vast increase in earnings which make certain terms of a prenuptial agreement imperative to review, and possibly change, in its entirety.
In summation, yes, once you have your prenuptial agreement completed and finalized by New York Prenup, by all means, file it away and feel the sense of security the document is there to foster. However, if you already have a prenuptial agreement and circumstances have changed in your marriage, in your assets and wealth, or you aren’t sure what the original terms were, or were vague and non specific, you’re going to want to revisit the terms in the form of a postnuptial agreement with New York Prenup attorneys who can assist you very quickly and easily in reshaping the document to reflect your current situation, and recommend and advise you on how to move forward.