Understanding prenuptial agreement costs in Pennsylvania

Under Pennsylvania law, when you get married, you and your spouse automatically gain certain financial rights. You have an obligation to support each other financially, and you share in assets acquired during the marriage, with some limited exceptions. Prenuptial agreements allow couples to plan how assets and income will be handled during the marriage and if the couple separates, divorces, or one spouse passes away.

One of the most common questions people ask is what prenups cost. The cost varies depending on your situation. However, certain steps should be followed in every prenup to protect both partners and meet their expectations.

Key takeaways:

• Prenup costs depend on the complexity of your finances, how much negotiation is involved, and how quickly you need the agreement completed.
• Starting early gives both partners time to gather documents, review terms, and sign without pressure.
• Each partner should have their own attorney to protect their interests and help ensure the agreement holds up in court.
• A prenup is an investment that can save significant money and stress if circumstances change.

Factors that affect prenup costs

The first step in preparing a prenup is meeting with an attorney to discuss your goals. During that meeting, the attorney explains the financial rights that come with marriage and how a prenuptial agreement can modify or waive those rights.

Generally, anything you acquire during your marriage is considered shared property belonging to both spouses, regardless of whose name is on it. If you separate or divorce, that property must be divided according to the law. A prenuptial agreement lets you protect assets you want to keep separate.

Here is a common example: one partner owns a business or plans to start one during the marriage. Without a prenup, that business becomes shared property that would need to be divided in a divorce. This could force the business owner to close or sell the business to pay their spouse’s share. It could also affect business partners.

Prenups are also valuable for subsequent marriages or marriages later in life. Partners who have earned wealth may want to pass it to children from their first marriage rather than to a new spouse.

Common questions to address in a prenup

Each person’s financial situation must be considered carefully. Some key questions to think about include:

• Will the couple live in a home owned by only one spouse? If that person passes away, will the home go to their children? How much time will the surviving spouse have to move out?
• What if the couple plans to buy a home together? What happens if they divorce or one of them passes away?
• What if one spouse must move to a nursing facility?

One of the challenges of prenups is that circumstances can change drastically over the course of a marriage.

Understanding spousal support

Spouses are legally required to support each other financially based on their incomes and ability to pay. During the marriage, this is called spousal support. There is also a type of temporary support called alimony pendente lite (APL) that may apply while a divorce is pending.

In some cases, a former spouse may be ordered to pay ongoing financial support after a divorce is final. This is called alimony. With a prenup, both partners can agree to give up the right to spousal support, APL, and alimony.

Negotiating support provisions requires careful consideration of what could happen during the marriage. For example:

• Does the couple intend for one spouse to stay home to care for children or manage household responsibilities?
• If so, that spouse will not have income during that time, and their earning potential may decrease depending on how long they are out of the workforce.
• They also may not be contributing to retirement savings during this period.

If the marriage ends in divorce, the spouse who was not working may need money to go back to school, update certifications, or take other steps to support themselves financially.

Other considerations include the possibility that one spouse becomes disabled and unable to work, or that a family member has medical needs requiring one or both parties to cut back their working hours. All of these scenarios should be addressed in a comprehensive prenup.

Spouses also have inheritance rights. Generally, you cannot completely exclude your spouse from your will. If you try, they can choose to take a certain percentage of your assets when you pass away. If you die without a will, your spouse is also entitled to receive a share of your assets. Prenups are a common tool for protecting family wealth and making sure assets go to the people you choose.

Once both partners understand their rights and what they can protect or give up in a prenup, the next step is to discuss the terms they want. Sometimes one partner drafts a full agreement and gives it to the other to review. Other times, both partners negotiate the terms together before the agreement is written.

Either way, each partner must have their own attorney because their interests are different. Pennsylvania law gives couples considerable freedom to negotiate and draft prenups, and courts will generally enforce such agreements even if they seem one-sided.

One rule applies to all prenups: both partners must share their financial information, including assets, income, and debts. This disclosure process is important and typically involves:

• Preparing a summary of each party’s net worth, including assets and debts
• Providing supporting documentation such as financial statements, appraisals, and trust documents
• Disclosing income, often by producing tax returns (if income fluctuates, multiple years should be provided)

While this step takes time, it gives each person a clear picture of the other’s finances and helps them understand what they are agreeing to by signing the prenup.

Timing and managing costs

A typical prenup takes several weeks to complete before the wedding. This allows time to gather financial information, negotiate terms, and draft and sign the final agreement. Each partner should have plenty of time to review a draft, talk to their own attorney, and sign before the wedding. This timeline helps avoid any claim that someone was pressured into signing.

Because each partner has different interests in a prenup, each person should have their own attorney. This protects both parties and helps ensure the agreement will hold up in court if it is ever challenged.

To reduce prenup costs, couples can take a few proactive steps. They can summarize their net worth and gather supporting financial documentation before meeting with their lawyers. They can also discuss their goals for the agreement and their plans for the future before engaging counsel.

Is a prenup worth the investment?

A well-written prenuptial agreement provides clarity by setting out what will happen if the couple separates or divorces, or if one spouse passes away. It can protect family businesses, preserve wealth for future generations, and save people from the stress, heartache, and expense of fighting over these issues in court.

Prenuptial agreements are an investment. The protection and peace of mind they provide pay dividends.