NY: Well, here's Nee's answer: In my own divorce practice, the biggest problems do arise when claims are made during the proceedings for the "appreciated value" of separate property, which, it appears, you knew about. NY case law, as it stands today, still holds that separate property remains separate during the marriage with the exception of "appreciated value of said property due to the direct or indirect contributions of the other spouse." Therein lies the rub: Just how does one prove or disprove "indirect contributions"? Direct is easy. This refers to any direct effort or monetary contribution which helped increase the value of the pre-marital or separate property, a hands-on approach to the property involved, including helping to run the business. Indirect implies background contributions, such as homemaker and child-rearing, etc.,which enables the other spouse to run the business, etc.
Now, let's talk about stocks and mutual funds: So long as these remain in your name alone during the marriage, they remain separate without going to the question of direct or indirect contributions of the other spouse. Why? Because this type of asset is self-appreciating due to market forces which are certainly not in the control of the other spouse. The same is true, for example, of pre-existing bank accounts, antiques and art work, which are also self-appreciating.
Prenuptial agreements are usually a good idea when one spouse has more separate property than the other, which may appreciate in the future. The agreement would disallow such appreciated values in the event of a divorce. Prenuptials are also important when the propertied party has children of another relationship and wishes to leave them as major
beneficiaries of the assets held before marriage. The original purpose of prenuptials still exists: The spouses both waive what is called the" right of election," which right allows a widowed spouse to disregard the other's will upon his or her death and claim from one-third to one-half of the deceased's entire estate as though there were no will at all (intestacy).
