Deciding when a prenuptial agreement can help

On Behalf of | May 5, 2020 | Blog, Divorce

Pennsylvania couples planning for marriage should discuss whether to get a prenuptial agreement, particularly if they are business owners. Assets acquired before marriage generally are considered separate property, and assets acquired by either spouse during their marriage are marital property, which must be divided “equitably,” or fairly, in a divorce. Individuals can make their own determinations on what they think is fair before they even get married by entering a prenuptial agreement.

Prenuptial agreements are particularly useful in equitable distribution states like Pennsylvania, where assets are not necessarily split 50-50 in a divorce. If one spouse had a business before marriage but the other spouse plans to help run it, the other spouse may want a prenuptial agreement to ensure he or she will be fairly compensated for his or her efforts in a divorce.

Prenuptial agreements can allow individuals to protect their separate assets that will likely comingle with marital assets during the marriage. With a business, any increase or decrease in its value during a marriage will be considered marital property, even if the business was owned solely by one spouse before marriage. If the other spouse is not going to have anything to do with the business, the titled spouse should consider how much of the business value he or she wants to provide the other if they separate.

If a couple does decide to enter a prenuptial agreement, there are more things to account for than property value alone. If one spouse owns a business and runs the business without the other’s assistance, but he or she does so so that the other can stay home with the kids, it would be fair for the stay-at-home spouse to get a share of the business. A family law attorney can help engaged couples decide how to structure a prenuptial agreement.


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