How Prenups Affect High Asset Divorces

By Sheryl Rentz on February 20, 2023

A prenuptial agreement is a contract entered into by two individuals who are planning to marry. Also known as a prenup or premarital contract, it is a legally binding agreement concerning ownership of each party’s assets should the marriage be terminated by divorce or death. In a high asset divorce, a prenup can help shield assets, protect children’s inheritances, and lay the groundwork for division of property and alimony.

What Are the Challenges of High Asset Divorce Proceedings in Pennsylvania

Terminating a marriage is always stressful, but high asset divorces can be particularly challenging. Generally, assets are more extensive and more valuable. They may include stock options, portfolios, businesses, inheritances, retirement savings, pension plans, real estate, and timeshares. As there is more at stake, divorce may be more contentious when matters such as property division, alimony, child support, and relocation are addressed.

What Can a Pennsylvania Prenup Cover?

A prenuptial agreement signed by both parties only goes into effect when a couple marries. This type of contract can be used to resolve how expenses will be covered during the marriage, payment of alimony in case of divorce, and division of property in case of death or divorce. Couples can tailor prenups to meet their own needs. For example, the written agreement between them can establish:

• Rights of each spouse to use, spend, buy, or sell assets during the marriage
• Rights of each spouse to property owned by either spouse
• How a family owned business will be managed
• How assets and debts will be divided in the event of divorce or the death of either spouse
• Entitlement of either spouse to spousal support
• Entitlement of each spouse to death benefits from insurance policies of the other spouse
• Rights of each spouse to the gifts or inheritances of the other
• Any other matter on which both parties agree

What Are the Requirements for a Valid Prenuptial Agreement?

Unlike many other states, Pennsylvania has not adopted the Uniform Prenuptial Agreement Act (UPAA). The rules for prenups are determined by state statutes and court decisions. They must be in writing and signed by both parties. To be enforceable, these agreements must follow the basic principles of contracts. They cannot be unconscionable or unfairly one-sided. Generally, courts will uphold prenuptial agreements unless:

• The agreement was not voluntarily signed by one spouse; or
• The agreement was unconscionable because one spouse failed to provide full and reasonable disclosure of assets and debts; the defrauded spouse lacked adequate knowledge of the other spouse’s finances; and the defrauded spouse did not, expressly in writing, waive the right to disclosure.

How Can Prenups Simplify the Divorce Process?

Prenups can help couples avoid arguments during a marriage by resolving matters of expenses and financial responsibilities in advance. Having a prenuptial agreement in place can also help the process run more smoothly should the marriage end in divorce. A high asset divorce can be lengthy and costly. With a valid prenup, issues such as property division, alimony, and what happens to the family business can be settled before the marriage, so a divorce can be obtained more quickly and less expensively.

How Can a Lawyer Help?

At the Law Offices of Sheryl R. Rentz, P.C., we can assist you with creating a prenuptial agreement that is fair, properly structured, and in your best interests. If you are facing a high asset divorce, with or without a premarital agreement in place, we can protect your rights and guide you as smoothly as possible through the process. Attorney Sheryl R. Rentz has more than 25 years of experience in divorce and family law. Contact us at (610) 645-0100 to find out how we can help.