By: Peter E. Iorio & Lauren L. Sorrentino
While getting married can be exciting, marriage is also a binding, legal agreement. As two individuals formally prepare to merge their lives, many benefits and risks come with this decision. If you’re heading down the aisle, it’s wise first to consider whether or not you need a prenuptial agreement or prenup, as it’s commonly called. There are several circumstances where a prenup should definitely be considered by one of the parties to the marriage. To achieve “happily ever after,” learn if a prenup is right for you and get tips on preparing your document before tying the knot.
What does a prenup cover?
Before considering whether or not you need a prenup, it’s best to understand what this document is and what it covers.
A prenup is a contract that defines the rights and responsibilities of each party in a marriage and what happens should the marriage end in divorce or death. Typical things covered by a prenup include:
- Personal assets or property of either party – one party may want to preserve their control over how assets brought to the marriage are to be handled upon divorce or death
- Inheritances – if a party has received or expects to receive an inheritance from their parents, a prenup can set forth what the rights are of both spouses to these assets
- Business assets or rights – if one party is a business owner, especially part of a family operation, they may want to make sure the continuity of the business is preserved
- Personal or business debt – parties to a prenup can agree on whether debts can be treated as marital property or property of solely one of the spouses
- Support rights – in some instances, a prenup can be used to limit the right of a spouse to receive support or alimony or to limit the type of income to be used in the calculation of such support
If a couple marries without signing a prenup, division of property is controlled by Pennsylvania law and/or a judge’s discretion.
A prenup and an estate plan – what’s the difference?
A prenup is not an estate plan, and in most circumstances, it sets forth the “floor” as to spouses leaving property to each other at death. A prenup is an important aspect of one’s estate plan, and should be considered when one is putting together their Will and other estate planning documents.
Suppose you are entering marriage with existing estate planning documents like a Will, Durable Power of Attorney, and Living Will. In that case, you should consider updating them to determine how your spouse should be treated throughout. Typically a prenup will not address who can make medical and financial decisions for you if you become incapacitated.
In most circumstances, you cannot disinherit your spouse. Incorporating a prenup into your estate plan can help ensure your property is divided as you wish.
You should consider a prenup if…
If two people of the same socioeconomic status are not concerned about the consequences of divorce or death, a prenup may not be necessary. Circumstances to consider a prenup include the following:
- There is an imbalance of assets – if one spouse wants to protect current or future wealth from spousal claims (either upon divorce or at death), or if one partner has debt, a prenup can help protect the other partner from potential creditors
- This is a second marriage – “blended families” present many challenges, and a prenup can set forth the rights/obligations of the spouse and children
- One party is a business owner – as noted above, business assets and rights can get messy amidst divorce or death, especially if one party shares ownership with family members; a prenup can set forth that a spouse does not have rights to certain business interests
How can I successfully create a prenup?
If a couple decides that a prenup is the way forward, it’s better to hash out a broad outline of your agreement before meeting with an attorney. Thinking through your “whys” and “whats” will help the process go more quickly and help your attorney address the situation more efficiently.
Just like creating a Will, putting together a prenup may seem overwhelming. A prenup can be as simple as setting forth an agreement on a few “important” issues and letting state law govern the rest. Not everyone needs a complex agreement like we often hear about concerning celebrities.
It’s important to note that a prenup requires full disclosure by both parties regarding assets, liabilities and other information. The agreement can be void if there is a failure to disclose the required information fully. The purpose of putting together a prenup is to ensure it is enforceable. Hiring an attorney in your home state is essential.
Should you consider putting together a prenup before getting married? Please reach out to a member of our Family Law or Estate Planning teams to see if a prenup is right for you.
