Prenuptial and Postnuptial Agreements
Asking a loved one to enter into any kind of agreement can often be a sensitive subject. While it may be difficult to think about a time when any marriage or romantic relationship may terminate, there may come a time when it does. Taking preventative measures now may make all the difference, should a marriage or romantic relationship come to an end. Whether prenuptial, postnuptial or cohabitation, an agreement is an excellent way to preserve and protect each other’s assets before things get emotionally charged.
Prenuptial agreements, also called antenuptial agreements, are often used when contemplating marriage in order to protect assets like real estate property and savings that either party is bringing into the union. On the other hand, postnuptial agreements are generally created after the wedding date in order to protect assets that either party obtained during the marriage and that both are in agreement should be considered separate property if there would be a divorce. Both are enforceable contracts under Pennsylvania law.
Either type of agreement can be simple and only address one term, or they can be extremely comprehensive and address the distribution of property, support, alimony, custody, inheritance, business rights, etc. Some common terms in an agreement address who would keep which assets upon a divorce (i.e. each may keep his/her/their own respective retirement account), when and how a residence will be distributed (i.e. the parties may agree that the house would be sold upon separation and each obtain a 50% share of the equity in the house), or that one party waives any and all interest in the other party’s family business. They can further outline terms for situations where a spouse engages in infidelity or terms that change based upon the duration of the marriage, etc.
While individuals entering into these agreements may have great leniency when it comes to the terms entered into, they should take great caution before doing so. Since they are valid legal contracts, even if the terms are weighted considerably in favor of one party, the contract will likely be upheld by the court, absent a showing of fraud, misrepresentation, or duress.
Both agreements require full and fair disclosure of each party’s financial position, and each party should engage the services of an attorney to receive advice regarding the legal impact of the contract. As these contracts involve looking at the hypothetical future of the parties and their finances, it is imperative that each individual fully understands how the contract could affect individual rights upon a divorce.