Attorney Discusses Drafting a Postnuptial Agreement in Pennsylvania
It's advisable for couples getting married to draft prenuptial agreements. These legally binding documents can protect the best interests of both parties involved. When a couple skips the prenuptial agreement, but still want the benefits of an agreement, they can draft what's called a postnuptial agreement.
While postnuptial agreements aren't always as beneficial as prenuptial agreements, they are much better than having no agreement at all. Postnuptial agreements can simplify the divorce process if the marriage ever ends.
The Pennsylvania family law attorneys at the Law Offices of Sheryl R. Rentz, P.C. have the knowledge and experience it takes to help you draft a postnuptial agreement. We can guide you through the process, helping to draft a secure and beneficial agreement that helps protect your individual assets.
Understanding the Postnuptial Agreement Process in Pennsylvania
First, it's important to understand that you can never exercise too much caution. If you're creating a business, you will want an agreement between you and your business partners that spells out expectations and responsibilities. Over half of all marriages in the United States end in divorce. So, you wouldn't really be overreacting if you were to prepare for the worst and hope for the best.
Postnuptial agreements require the following elements, at minimum, to be enforceable in Pennsylvania:
- Written: For Pennsylvania courts to consider a postnuptial valid, the agreement must be in writing.
- Full Disclosure: In most states, a postnup must include all assets, incomes, and property. Within Pennsylvania, this element can be waived based on the opinion of the divorce court. It is best to discuss this matter with a Montgomery County divorce attorney to decide what is best. In addition to being transparent, a postnup should not favor one member over the other, however this is also subject to debate in Pennsylvania.
- Voluntary: Both members must fully agree to the terms of the postnuptial, otherwise the agreement will not be recognized by Pennsylvania law.
- Validly Executed: The agreement must be signed by both spouses and notarized.
To begin preparing a postnuptial agreement, each spouse should create a written list of all of their personal belongings, assets, and debts, as well as who will retain ownership over each item following a divorce. Once you have each included the value of your half of the marriage, then you will want to include specific agreements regarding the postnup, namely:
- In the event of the divorce, will you have procedures handled in court or through mediation?
- How will family businesses be managed after a divorce?
- Who will live in the marital house or houses, and who will bear responsibility for any related taxes or bills?
- How to divide retirement plans?
The answers to these questions and each member’s list of personal assets will be included in a draft of the postnuptial agreement. Once you have both agreed to the terms, you will sign the contract and have it notarized.
Pros and Cons of a Postnup
Generally, engaged couples do not view their potential marriage in terms of financial matters and do not have the foresight to develop a prenuptial agreement – or they do not wish to create tension in the build-up to their wedding. A postnup can allow a couple to fully assess their finances and prepare for any future changes to their relationship. The various benefits to a postnuptial agreement include:
- Changes in careers or financial situations may constitute a need for a postnup. If one member has bad spending habits, including a history of gambling addiction, then a postnup would ensure the other member remains free of all debts or losses following a separation. Alternatively, if one member suddenly comes into a large sum of money, a postnuptial agreement would allow them to set it aside as their own personal savings. If the couple has a prenup, the postnup can also help fill in the gaps if they find that their spending habits have changed, or their careers have taken a shift and each member wishes to secure their financial independence.
- If a couple is contemplating divorce, or never planned for their marriage to be permanent, a postnup will allow them to distinguish their assets in advance. As a result, they may be able to speed up the divorce process, as finances and property division are the bulk of the matter in most divorces.
- Postnups may help alleviate the pressure or anxiety that comes with thinking about one’s financial future. For married couples, this anxiety may negatively impact their relationship, but properly securing each member’s property can take many of those fears away and allow them to focus on each other. Best case scenario, the couple will not need the postnup and will have a happy, fulfilling marriage for the rest of their lives.
- If one or both parents have children from a previous marriage or relationship, a postnup would allow each parent to secure their respective child’s financial future.
It is important to remember that postnuptial agreements are not a cure-all for marital and financial issues, and an agreement may come with its own types of downfalls. Couples should not consider a postnuptial agreement when:
- One or both members feel that it will create unnecessary tension in the relationship or will not provide any benefits to their future.
- One partner feels that the agreement will unfavorably benefit the other spouse, particularly if they make more money.
- Both partners are not in full agreement about their financial situations. Postnups are subject to state courts, and judges may dismiss them if the agreement is not fully transparent for both members.
What Should I Include in a Postnup?
Everyone has some tangible assets when entering a marriage. It is common for individuals to fail to create lists of their belongings before marriage. Write down your personal belongings, including just about everything with value. This should include pets, jewelry, art, and everything that is precious to you. You will also want to include a list of family heirlooms you have. There are a few things that can cause as much heartbreak during a divorce as losing family heirlooms.
In addition to personal belongings, financial assets can be a major part of a postnuptial agreement, specifically if they were acquired prior to the marriage These can include stocks, bonds, annuities, IRAs, frequent flier miles, and savings accounts.
Keep in mind that the agreement can cover preferences that are not actual belongings as well. For example, it may prove useful to write out who gets to continue using the gardener, cleaner, trainer, and personal assistant. This becomes easier when you view a marriage like a small business and factor in any service that is often relegated to one part of the business over the other. Now, if you and your spouse have joint ownership over an actual business, then that is an entirely separate matter and should be discussed thoroughly with a Pennsylvania family law attorney who can perform a business valuation.
While properly accessing the value of each member’s portion of the marriage is important, you may also wish to divide specific debts, such as credit card bills, mortgages, car payments, and any other financial losses.
How to Keep Postnuptial Agreements Enforceable
Postnuptial agreements are more difficult to defend in court than prenuptial agreements. So, it's important that they're drafted correctly. It is equally important to update the agreement from time to time. Adapting the agreement as the circumstances of the marriage change will keep the document relevant and enforceable.
It's also important that proper steps get taken to strengthen the postnuptial agreement. Both parties must agree to the terms of the agreement and sign the document. Both spouses should have a lawyer review the document. Postnuptial agreements are often disputed in court on the grounds that one party didn't have proper legal representation when they signed the document.
Postnuptial agreements aren't as easily defended as prenuptial agreements, but they can prove useful. If you have assets you wish to protect, make sure you have an agreement in place before or even after your marriage. You have a right to your belongings no matter what happens in your relationships.
Contact the Law Offices of Sheryl R. Rentz, P.C. at (610) 645-0100 to schedule your free consultation.
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