Post-Pandemic Prenuptial Agreements
COVID-19 has had an impact on how couples and families manage their financial lives. The pandemic has made many people realize the importance of having their affairs in order, especially in the event of a crisis such as illness or job loss.
Just as emergency funds are the foundation of strong personal money management, having a prenuptial agreement (or postnuptial agreement) in place is also crucial for crisis planning. While prenuptial agreements are often thought of as a safety net for an equitable division of assets in the event of a divorce, these agreements are also very helpful when one spouse dies.
A prenup or postnup can determine how your marital assets will be handled among surviving family members. These agreements can establish expectations in order to reduce potential, future conflict among the surviving spouse, children from the marriage and/or children from any previous marriages. It clarifies property and debt division in the event of a spouse’s death so as to avoid any confusion during an otherwise difficult time.
The term “premarital agreement” means an agreement between prospective spouses made in contemplation of marriage and to be effective upon marriage. Regarding the death of a spouse, prenuptial agreements may address these matters:
- Property and debt division
- Matters related to a family business
- Rights to inheritance or gifts acquired by the other spouse
- Claims for death benefits from the other spouse’s insurance
I have found in my years of practice that there are generally three categories in which individuals contact me with respect to these agreements and what these agreements can include:
- They want to protect very specific assets or a business that existed before the marriage and prevent these assets from being inherited by a spouse;
- They want to prevent their premarital assets from being divided in the event of divorce; and,
- They want to spell out specifically how their assets would be divided in the scenario of divorce. This type of inquiry is often made by individuals who have already been through a divorce and failed to consider entering into a pre-nup agreement.
In addition, there are some common misconceptions about prenuptial agreements which is why it is very important that an experienced family law attorney is involved in the preparation and drafting of a pre-nuptial agreement.
- Individuals are under the impression that a prenup must be done within a certain time period before the marriage takes place. In actuality, there is no specific time frame – it can even be signed on the day of the marriage. In fact, the agreement can also be drafted and signed after the marriage which would then be considered a post-nuptial agreement.
- People are often under the mistaken impression that these agreements are truly valid contracts and can be broken or simply not followed. In fact, pre/post nuptial agreements are binding in the state of Pennsylvania if there is a full and fair disclosure of assets and debt from both parties at the time of signing. This is an essential term of these agreements and one spouse could challenge the validity of the agreement if they can show that certain assets were not disclosed. This is yet another reason why an experienced attorney should prepare these agreements.
With experience and proper advice, prenuptial agreements can be a useful and beneficial tool to avoid unnecessary conflict and stress later on and give individuals peace of mind regarding assets that they wish to protect.
If you are interested in drafting a prenuptial agreement to protect your assets and income and avoid the potential pitfalls of a divorce action, contact us to get started. We have drafted many types of agreements, ranging from simple agreements that exclude premarital assets to those that help parties avoid divorce litigation Call 215-860-9700 or contact us: https://susaneisenberglaw.com/contact-2/