What is a Prenuptial Agreement in PA?
A prenuptial agreement or "prenup" is a document that protects a person's assets in the event of divorce or separation. This means that parties can pre-determine who will get what when and if they divorce. This means that any property/assets set out in a prenuptial agreement are not "up for grabs" during equitable distribution and are provided to the spouse who receives them under the prenup (assuming the prenuptial agreement is valid).
Why might someone want a prenup?
A person might want a prenup in order to protect significant assets and to ensure that these assets are maintained by the person or the person's family who brought them to the marriage in the first place. A person with significant family inheritances, business interests, or assets for children of a prior relationship may want a prenup in order to protect these particular assets. Prenups can also be used for estate planning purposes as well to protect against the payment of support, alimony pendente lite, or alimony.
How can you contest or challenge a Prenuptial Agreement?
The burden of proof to challenge a prenup is on the party who is arguing that it is not enforceable. One of the challenges that can be made to a prenuptial agreement is based on information that the party did not execute the agreement voluntarily. Another way that a prenup can be challenged is through claiming that the party challenging the prenup was not provided with a fair and reasonable disclosure of the property or financial obligations of the other party. This is a common challenge that can be made when one spouse is claiming that they were not provided with a full financial picture of what assets their spouse had coming into the marriage. A party can also challenge a prenup when they did not voluntarily and expressly waive (in writing) any of their rights to disclosure of the property or financial obligations of the other party beyond the disclosure provided. Lastly, a prenup can be challenged on the grounds that the challenging party did not have adequate knowledge of the property or financial obligations of the other party.
What should be disclosed in Prenuptial Agreement?
Specifically, a party should disclose the following in a prenuptial agreement (so as to constitute full and fair disclosure of all assets):
- Real property (including land owned, the marital residence, vacation homes, and timeshares)
- Retirement Accounts (401(k), Pensions, IRA's, Thrift Savings Plans)
- Investment Accounts
- Bank Accounts (checking, savings, certificates of deposit)
- Business interests (corporations, partnerships, sole proprietorships)
- Vehicles (cars, trucks, boats, recreational vehicles)
- Household Belongings/furnishings
- Life Insurance Cash Surrender Value
- Income (by using recent tax returns)
- Debts (credit card payments, mortgages/home equity loans, student loan debts, any other loans)
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