Finances may be one item that you do not think about during your engagement. But property and money are among the most complicated matters that married couples face. Divorce, particularly a high-asset divorce, complicates financial matters even further. A prenuptial agreement can help couples prepare for dividing their assets and debts and deal with other issues.
What a prenup is
A prenuptial agreement is a private contract that the couple enters before their wedding. It gives the parties the opportunity to settle financial matters and address spousal support if they ever divorce or a spouse dies.
A prenup also encourages financial planning before marriage because each party must disclose their assets and debts. They can also come up with their own plan to divide property instead of a Pennsylvania court imposing division in a divorce decree.
These agreements can set forth the financial rights and duties of each person. Prenuptial agreements can also provide protection from the other spouse’s debts.
A prenuptial agreement cannot contain illegal conditions or violate public policy. These agreements may not address child custody which is decided by the courts in the best interest of the child.
Who needs a prenup?
Prenuptial agreements are especially important for couples with substantial assets. But any anyone who has personal property, assets or liabilities should consider entering a prenuptial agreement.
These are also helpful for a spouse with children from an earlier marriage or relationship. The prenuptial agreement may help assure that these children receive property.
How to prepare one
Leave plenty of time to negotiate, prepare and enter the agreement before the wedding. A last-minute agreement may be invalidated as being entered under duress.
Both parties must also be fully transparent about their finances to make the agreement more effective and help them with financial planning during their marriage. A court may invalidate an agreement if a spouse withheld information.
The agreement must be fair for both spouses. Both parties must enter it voluntarily. It needs to be written and meet certain formalities on execution.
Each party should have their own attorney assist them with negotiating and preparing a prenup to assure that their rights are protected. An attorney can also help prepare an agreement that meets their needs.