Prenups may not be romantic, but can protect assets
In 2016, brides and bridegrooms may say “for better, for worse, for richer, for poorer” but the vows may not mean what they did 50 years ago.
In addition to their marriage licenses, couples today may sign legally binding prenuptial agreements covering the “richer and poorer.”
According to Will White of the law firm of Dillon, McCandless, King, Coulter & Graham in Butler, it wasn’t until the 1980s that the Pennsylvania court system embraced prenuptial agreements and recognized them as contracts.
“We do see more of them. They seem to be more prevalent and more useful,” White said.
He said there are three reasons people create prenuptial agreements.
The most common is the partners already have wills, estates or trusts, and they want to take care of their children.
White said another reason is the sharp increase in the number of people remarrying. They want to protect their assets such as a house from a previous marriage.
He said the third reason is “because it’s doable and available, and people are learning about it.”
White said these agreements can be complex to draft.
“It’s more intensive. It does require more hand holding or face-to-face time, which typically runs up the bill,” he said.
White said some attorneys are not comfortable preparing such agreements.
Wesley Hamilton, a sole practitioner in Zelienople, said it is “penny-wise and pound-foolish” to try to prepare a prenuptial agreement without an attorney. The document may not be considered valid.
“The biggest risk you’ve got if we’re just dealing with the prenuptial is not understanding what all is involved and what can be included in that agreement,” he said. “If you do not do the prenuptial agreement correctly, it can be set aside by the court.”
Hamilton said these agreements are explored as options more frequently today, but a client may ask for a draft and then determine the agreement is unnecessary. Also, there are some clients who want to have an agreement, but feel it will not be well received by their partner.
“It can at times be quite intimidating for people who are considering it,” Hamilton said.
“It’s very unromantic to talk about,” said Kelley Harley, associate attorney at Jaffe & Kecskemethy in Butler. “It can be a turnoff to some people.
“I think it can be an effective tool for planning, but everyone needs to decide how detailed a document they want this to be and what they are trying to achieve by having it done,” said Harley.
As an example, she said a person might have their own business and not want it divided by a divorce.
“They are more common in second or subsequent marriages,” Harley said. “We don’t see a lot of people who are 23 coming in and saying, ‘Let’s do a prenup,’ when they don’t have assets.”
Harley said the language must be very specific.
She said a well-written agreement will include a clause that says the other partner received full disclosure, that they understood it, have had counsel review it and have been able to ask for information about it.
White said either partner can have the agreement prepared. However, the lawyer preparing the document can only represent one individual, even if both partners came to the office together.
He said both partners must sign the agreement. The agreements are not valid if it can be shown that they were signed under duress or there was deceit or trickery involved.
“The biggest mistake I see is people trying to do too much,” White said.
He said when people try to include alimony, child support and custodial issues they are looking too many years into the future.
“(They) try and wrap up the entire potential divorce instead of taking the immediate issues, which is easier to do,” White said.
Hamilton said it is common to meet with couples who don’t want a prenuptial agreement but want to understand Pennsylvania family law such as ownership of a house purchased before marriage or leaving money for children in their wills.
“It’s not uncommon to have the prospective bride and groom asking the same questions,” Hamilton said. “They want to make sure they have things set up to protect one another and to protect the children from a prior marriage.”
“People who have utilized a prenuptial agreement to their best advantage are ones that do not come in with a preconceived notion,” Hamilton said.
Hamilton said he first explains family law and then asks them what they are trying to accomplish.
“I am going to make sure I am giving them enough information that they can make a decision,” Hamilton said. “I don’t have a crystal ball as to whether your marriage is going to be successful or not.”
“This is not something you want to do the week before the wedding,” Harley said. “If you’re having disputes, you don’t want it a few days before the wedding.”
White recommended having enough time to properly assess and review the details.
A prenuptial agreement also can protect a partner from claims by the other partner’s children.
“If everything is done properly, children of a prior marriage are locked into it and cannot set it aside,” Hamilton said.
Harley said in most marriages, usually the retirement equity and the house are the biggest assets. Dependent spouses should be sure their rights are protected.
“You want to be careful entering into an agreement because you could be giving up rights you might have under the domestic relations laws,” Harley said.
She said a prenuptial agreement can be modified if both parties agree and the agreement allows for it. They also can agree that they no longer want the agreement.
“The purpose of any contract is to avoid disputes. It cannot guarantee it, but if you have enough time you should be able to limit that possibility dramatically,” Hamilton said.
