A Prenuptial Agreement (“ prenup”) or antenuptial agreement is a contract entered into prior to marriage which provides for the division of property and spousal support/alimony in the event of divorce or death. It can also determine how finances will be handled during the marriage.

In the absence of a prenup, property division and spousal support are governed by the Pennsylvania Divorce Code. Pennsylvania is not a community property state. That means that marital property is not always distributed equally in the event of divorce. Pennsylvania divorce law sets forth various factors, including the length of the marriage, age and health of the parties and respective incomes, all of which are taken into account to divide the marital property in a fair and equitable manner.  Marital property, as well as any increase in the value of non-marital property, may be subject to equitable distribution.  In addition, a spouse may have an obligation to pay spousal support or alimony to the other spouse.

If a spouse dies during the marriage and there is no prenup, Pennsylvania law provides that if a spouse dies intestate (without a will), the surviving spouse may still have rights to “elect against the will” for the spouse’s elective share, which is the first $30,000 plus a 50% share of the balance of the estate. If the deceased spouse has a child with a parent other than the surviving spouse, the first $30,000 elective share will not apply.

If a party is seeking protection for separate assets, has an interest in a business, and/or has children from a prior marriage or relationship, executing a prenup can make a lot of sense. It provides certainty for both parties in the event of divorce and death, and avoids the expense of litigating the division of marital property.

In Pennsylvania, prenuptial agreements are binding and enforceable so long as certain requirements are met. The parties must make full disclosure of their assets and income, and the prenup must be free of fraud and duress. The prenup does not have to be fair to both parties. So long as there has been proper disclosure and there is no fraud or duress, the parties can agree on any terms they wish.  It is strongly advisable, however, that the parties retain separate legal counsel prior to the execution of the prenup.  With the Collaborative Law approach to negotiating a prenup, both parties have attorneys and work as a team to achieve the best result for all concerned.

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There are no hard and fast rules for a prenup, nor is there a standard form agreement.  A couple can determine the extent to which the other party will share with each other in the event of divorce or death, and the scope can be as broad or as limited as they desire.  The agreement may provide that any increase in a premarital asset remains separate property, and that any property acquired by the parties during the marriage (marital property) is to be divided equally, or in proportion to respective incomes or contributions. The prenup can dictate how finances and expenses will be handled during the marriage. The parties can agree to waive alimony, or agree that any support paid to the other party be limited in amount or duration. The prenup can provide protection to a party coming into the marriage owning real estate which will become the marital residence. It can determine whether title to real estate will remain in the name of one party or become joint, whether any increase in equity will be shared and the length of time a surviving spouse may remain in the house in the event of the death of the titled owner. The prenup can penalize an unfaithful spouse; it can also provide that it will become null and void after a specific period of time (eg. 10 years of marriage).

Although the discussion and negotiation of a prenup may not sound very romantic to an engaged couple, having the agreement in place can provide certainty to both parties and protections that go well beyond the Pennsylvania divorce and estate laws.

Categories: Family Law