by Jonathan C. Noble, Esq.
Prenuptial agreements in Pennsylvania can save tens of thousands of dollars in costs and fees in the event of a divorce. It can also save your business, limit your exposure to your spouse’s non-marital debts, limit possible alimony payments, and safeguard other valuable assets.
A prenuptial agreement (also known as a premarital or an antemarital agreement) is a legally binding agreement between two people who are planning to marry. The goal of this post is simply to have you think about some of the advantages of using a prenuptial agreement.
While every situation is different, nobody goes into a marriage hoping the marriage will end. Unfortunately, many marriages do end. Some end amicably, with mutual respect, and without much disagreement. Many others, not so much. While bringing up the subject of entering into a prenuptial agreement can be stressful in certain situations, it is certainly worth speaking to a family law practitioner about how a prenuptial agreement can help safeguard you, safeguard your business, safeguard your assets, and safeguard your children from a prior marriage in the event your marriage ends.
A prenuptial agreement can help streamline property distribution in the event of a divorce.
In Pennsylvania, if you divorce, your assets are categorized as either marital or non-marital property. Marital assets need to be valued, so they may be divided properly in the event of a divorce.
Marital property is broadly defined as property acquired during the marriage, or the increase in value (during the marriage) of non-marital property. For example, you may own rental property prior to getting married. Any increase in value of the rental property during the course of the marriage is considered marital property and subject to equitable distribution should you divorce.
Non-marital property is broadly defined as property acquired before the marriage, or property acquired by gift or inheritance. This is important: Non-marital property also includes anything normally considered marital property that you and your (soon-to-be) spouse agree to designate as non-marital property in a properly drafted and executed prenuptial agreement. That could include a business you own and have built for many years.
There are many reasons why a prenuptial agreement makes perfect sense for many people. Both women and men often initiate the use of a prenuptial agreement upon contemplating a second (or third) marriage. One of the many benefits of having a prenuptial agreement is that a prenuptial agreement can serve to protect the interests of children from a previous marriage.
Enforceability of Prenuptial Agreements in Pennsylvania
In broad terms, Pennsylvania courts have generally treated prenuptial agreements using contract law principles. Normally, a prenuptial agreement must be executed voluntarily and with a full and fair disclosure of a party’s assets and liabilities. (If a party voluntarily waives the full and fair disclosure of assets and liabilities requirement in writing, a prenuptial agreement may still be upheld in Pennsylvania). Full and fair does not mean “exact” in the context of a prenuptial agreement.
There are several very important steps to making sure your prenuptial agreement is both enforceable in Pennsylvania and/or decided under Pennsylvania law should you move to another state during the course of your marriage or move to another state after you have separated. You should also leave plenty of time before the wedding to finalize and properly execute a prenuptial agreement. One rule of thumb is to try to properly handle the prenuptial agreement before the wedding invitations go out. Both parties should have time to examine the contents and consult with counsel of their choosing if they so desire.
If getting married is in your future, you should seriously consider consulting with a family law attorney who can guide you through the process of using a prenuptial agreement in an effort to protect your assets in the event your marriage ends.
Similar to purchasing insurance, you hope to never need to use a prenuptial agreement, but if you do, it could be well worth your investment.