Celebrity couples are constantly in the news when they divorce because of disputes that may have been prevented by a prenuptial agreement. Couples in Pennsylvania, regardless of their fame, should also consider the value of these agreements. A prenup may be beneficial where a person has children from an earlier relationship. Older couples may also benefit.
Where a person is entering a marriage with considerable assets, a prenup may help fairly divide property if the relationship later ends and a high asset divorce is likely. This also benefits people who wish to insulate their partners from their debts or liabilities.
Prenuptial agreements are more effective if it is used with other protections. First, a couple should identify each of their separate assets that they have before their marriage and whether these assets will become community or separate property.
Other assets have to be considered. These include whether wages or earnings from employment or work during marriage are community or separate property. Couples often overlook whether pre-marital debts or liabilities remain separate or assumed by the couple.
Couples should also pay particular attention if, which frequently occurs, one spouse has significantly more assets or income. A prenuptial agreement could allow some of these assets go to the less wealthy spouse over time to provide some financial protection for that spouse if a long-term marriage ends in divorce.
Entering an Asset Protection trust, together with a prenuptial agreement, may provide additional protection from lawsuits, divorce and other actions. These trusts are designed to provide more financial protection for the trust's creator. Thesee trusts should be executed and financed before the prenup is executed.
A prenuptial agreement may also protect privacy. These are even more effective if these are paired with a separate confidentiality agreement.
Couples entering marriage or another relationship may face several issues in addition to whether they should enter a prenuptial agreement. Seeking legal advice can help resolve a dispute and protect their interests if there is a divorce.
Source: Kiplinger, "A tale of two celebrity marriages and one prenuptial agreement," John M. Goralka, Sept. 13, 2016