Prenuptial Agreements: Protecting Your Assets Before Marriage

What Is a Prenuptial Agreement?

Also known as a premarital agreement, a prenuptial agreement (prenup) is a legally binding written contract entered into between two people before their marriage. The agreement lists each party’s property and debts and specifies rights to that property in case the marriage dissolves, or one of the parties dies. State law on prenups can be found in the Pennsylvania Consolidated Statutes, Title 23, § 3106. Premarital agreements.

Can a Prenuptial Agreement Be Set Aside?

It is possible to set aside a prenuptial agreement in Pennsylvania under certain circumstances. The burden of proof is on the party alleging that the prenup is unenforceable. Under the law, a premarital agreement cannot be enforced if the party seeking to set it aside can prove that:

• The agreement was not executed voluntarily by that party or
• They were not given fair and reasonable disclosure of the financial obligations or property of the other party before signing the agreement; did not expressly waive in writing any rights to that disclosure beyond what was provided; and lacked adequate knowledge of the other party’s property or financial obligations. 

Is It a Good Idea to Have a Prenuptial Agreement?

Some people believe that signing a premarital agreement is tantamount to planning for divorce before the wedding. In reality, it is a financially responsible step that can benefit both partners. A prenup can protect the assets of both partners and ensure each party remains legally responsible for any debts they bring into the marriage. It can help ensure the financial stability of any children either partner has from a previous relationship. Couples who marry later in life, who have acquired separate property and may have children or even grandchildren of earlier marriages, could likely benefit from premarital agreements. 

For couples who do not have a prenuptial agreement, state law determines what happens to the marital property if they should divorce. In an equitable distribution state such as Pennsylvania, the courts consider many factors when determining how assets and debts should be divided. A premarital agreement allows the parties entering a marriage to maintain better control over their property. 

What Is Included In a Premarital Agreement?

A well-drafted prenup can benefit both parties and address concerns before the marriage begins so both partners know what is expected and required of them. It lays out the rules concerning property, finances, and other essentials to which both parties agree. A premarital agreement may include:

• Full disclosure of financial information, including income, assets, and liabilities
• Complete itemization of the separate property of each party
• Limitations on liability for debts of the other spouse
• Provisions allowing a partner who built a business before the marriage to limit or prevent the other partner from acquiring an interest in the business
• Provisions for alimony to be paid by the higher-earning spouse in case of divorce or waiver of the right to receive alimony
• Property to be inherited by children from a previous relationship
• Share of each spouse’s assets the other spouse will receive for estate planning purposes
• Description of each spouse’s responsibilities, such as payment of household expenses, contributions to savings accounts, and management of joint bank accounts
• Confidentiality clauses to protect the privacy of both parties

What Are the Benefits of Having a Prenup

A prenuptial agreement can help a marriage succeed by putting future spouses in a position to communicate their general attitudes toward money, their financial goals, their savings and spending habits, and their debts. As money problems are a leading factor contributing to divorce, the conversations necessary to create a prenup can help build the foundation for a stronger marriage. Partners who cannot agree on the issues covered in a premarital agreement may want to reconsider marriage. 

A prenup can help protect marital assets from creditors attempting to collect premarital debts. It can help prevent a business from being destroyed by divorce. For stay-at-home spouses who contribute to marriage through homemaking and/or caring for children, prenups can protect divorce laws that have limited long-term alimony. If the marriage does not succeed for any reason, a prenuptial agreement is a wise investment that can significantly reduce the contentiousness and expense of a divorce, as well as the length of divorce proceedings. 

Does Signing a Prenup Increase the Chances of a Divorce?

Nearly 50% of U.S. marriages end in divorce, and only a small percentage of couples who marry have premarital agreements. The divorce rate for the U.S. in 2022 was 14.56 divorces per 1,000 married women, as reported by Bowling Green State University. Pennsylvania ranked number 44 among the 50 states, with one of the lowest divorce rates at 12.21 divorces per 1,000 married women. There is no evidence that signing a prenup leads to a higher risk for divorce. In fact, a good prenup may represent a positive force in a healthy marriage. At the very least, it can provide an exit strategy much closer to the wishes of the partners than a court-ordered divorce while sparing them the time, expense, and stress of fighting over the issues at trial. 

Why Choose Us For a Prenuptial Agreement?

At Peak Legal Group, we focus on building relationships with our clients. You are never just a number to our legal team. We are down-to-earth, responsive, and work to help you understand the issues and your options, so you are better equipped to make the right choices. If you are planning to marry and are considering a prenuptial agreement, contact us at (610) 989-7064.