Prenuptial, Postnuptial and Cohabitation Agreements
A prenuptial agreement (“prenup”) is an agreement, or contract, made between two people in contemplation of marriage and that becomes effective upon the parties’ marriage.
A postnuptial agreement (“postnup”) is essentially the same as a prenup except that is an agreement made during the marriage.
A cohabitation agreement (“cohab”) is between two people who are living together but do not intend to be married.
Since half of all marriages end in divorce, it is important to be prepared. More and more couples are becoming aware of the value of having such an agreement.
A prenup must be executed before the wedding and it sets forth property rights and expectations in the event of a divorce. A well-drafted prenup can override the matrimonial laws of the state. By signing a prenup, the couple can decide in advance what property will be separate, that is, belonging to one spouse or the other, what will be marital and how the marital property will be divided. They can waive or limit alimony to be received by either party. They can also protect one party against the debt of the other party. They do not cover child support and child custody, as these issues would most likely be unenforceable. A prenup is really a business agreement in which each party is making sure they are protected in the event their marriage doesn’t survive.
Who Should Have a Prenup:
People find them helpful if there is certain property that they want to protect, such as a family business or a vacation home. Other reasons for entering into a prenup include:
• having children from a prior marriage for whom you want to protect certain assets,
• one party makes substantially more money than the other,
• one party is bringing in substantially more assets into the marriage than the other.
The fact that people now tend to enter into marriage at a later age means that more people now often have significant assets to protect at the time they marry. If the parties are on a relatively equal ground when they enter the marriage, then they may not need a prenup. However, that equality may change with time and they still may want to consider how their marital affairs will be handled given possible changes to their situation.
Requirements for a Prenup:
Each spouse should have a separate attorney. That way both parties will be advised of their rights. In addition, a prenup should contain the following elements:
• The agreement must be in writing, executed by both parties and witnessed.
• It must be executed voluntarily.
• Assets and liabilities must be reasonably and fairly disclosed.
Although anyone can draft a prenup, the danger in parties doing so without consulting an experienced family law attorney, is that the agreement may not be comprehensive enough to really protect them or the agreement may be unenforceable. Both parties should consult a family law attorney to obtain independent legal advice when creating such an important contract.
The main difference is the timing and the fact that a postnup can include assets that have been acquired since marriage. Postnups are entered into for the same purpose as prenups; that is, they define the division of marital property in the case of a divorce.
Two additional reasons that postnups are drafted are:
1) to avoid divorce by resolving recurring issues in the marriage – such as serious financial concerns to the everyday issues of who will be responsible for specific household chores.
2) to revise previously executed prenuptial agreements – some are using the postnup to extend a prenup that is set to expire after a certain period of time; others are making the terms of the prenup more moderate, particularly where the parties have been married for a long time.
The Parties to a Cohabitation Agreement are Unmarried and Don’t Intend to be Married:
Cohab agreements are very similar to prenups. They are contracts that address the financial arrangements and property of two people living together. Cohabitation agreements are entered into by couples who choose not to marry or who may not marry because of laws prohibiting same-sex marriage. If the parties aren’t sure whether they will marry in the future, then a cohab agreement can be combined with the language of a prenup so that the agreement will stand if the parties do eventually decide to marry. Otherwise, it would expire at the time of marriage and would have to be replaced by a later postnup.
Contact a Family Lawyer at O’Donnell, Weiss and Mattei, P.C.:
Our experienced family law attorneys at OWM Law work with clients who wish to provide predictability to their financial futures by establishing the terms of prenuptial, postnuptial and cohabitation agreements. We attend to all the necessary details to ensure an easily understood, comprehensive and enforceable agreement. We also represent clients who wish to amend their existing agreements or to enforce the terms of their existing agreements. Contact us to learn how we can assist you with your family law matters.
Information regarding Prenuptial Agreements, Postnuptial Agreements and Cohabitation Agreements is featured in this month's episode of OWM Legal Talk, which can be viewed on our website at www.owmlaw.com/legal_talk/legal_talk.php.
OWM is pleased and proud to announce that Victoria S. Hollister, Esq., has been named in the Main Line Today 2012 Top Lawyers Directory for Divorce Lawyers. See article here and click on the link for Divorce Law.
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David A. Megay, Esq., speaking at SCORE Business Planning Seminars on 9/10/12 and 11/5/12 - "Starting Your Own Business" (contact SCORE at 610-327-2673).
David A. Megay, Esq., speaking at Chester County Night School Seminars at Owen J. Roberts High School, Pottstown, PA, on 9/26/12 - "Ask the Lawyer: Legal Tips on How to Buy and Sell Real Estate in Pennsylvania," and on 10/17/12 - "Ask the Lawyer: Starting Your Own Business: A Legal Standpoint" (click here for more information).
Kathleen M. Martin, Esq., speaking at Chester County Night School Seminars at Owen J. Roberts High School, Pottstown, PA, on 9/26/12 - "Elder Law Issues," and on 10/10/12 - "Beyond the Simple Will," and at Pierce Middle School, West Chester, PA, on 10/2/12 - "Elder Law Issues" (click here for more information).
James C. Kovaleski, Esq., and Jamie V. Ottaviano, Esq., speaking at the Annual Educational Conference of the Huntington's Disease Society of America on 10/21/12 at the Spring Garden Reception Conference Center in Middleton, PA (contact 717-939-4003).
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