What do you think of when you hear the term “prenup?” Is it a rich and famous celebrity that comes to mind? Is it a wealthy, gray-haired gentleman marrying a much younger, second (or maybe) third wife? If you did, you are certainly not alone. Marital agreements, such as prenuptial or postnuptial agreements, however, apply to a much broader scope of couples. Some of the more common reasons individuals execute marital agreements are highlighted below:
- Business owners – Individuals who have earned a stake in the family business or who have built their own company from the ground up are understandably protective of such business interests. A marital agreement is a great way to protect that business, and its future growth, from any disruption which could be caused by a divorce or death of the business owner.
- Real estate owners – Whether it’s a family farm or a property purchased individually without one’s spouse, many couples use marital agreements to define each party’s rights to or interests in real estate. This may mean defining the property, and its appreciation, as one party’s separate property (and therefore rendering it free from equitable distribution upon divorce) but may also include determining how the property will be valued, how that value will or will not be distributed between the parties, and who must vacate the property and when.
- Second (+) marriage – Marital agreements are often an ideal tool for those entering into a second or third marriage. By this point in their lives, these individuals may already have children from a prior relationship. In Pennsylvania, a spouse is entitled to at least one-third of his or her deceased spouse’s estate; however, with a marital agreement, parties can agree to waive such rights and allow the Last Will of either spouse to dictate the shares for his or her heirs. Previously married individuals are often “gun-shy” about a subsequent marriage, having already been through the divorce process. A marital agreement may ease anxieties by limiting financial exposure in the event of separation, divorce or death.
The Estates Practice Group at Stock and Leader is here to assist you in protecting your property and keeping your best interest in mind. If you seek to discuss creating a marital agreement, call Stock and Leader today.