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Getting married is one of the most romantic things a couple might have during their lives. Although being “too much” in love could seriously affect your judgment when executing a prenuptial agreement, that is designed to address financial matters rather than personal preferences before the marriage. Think about it as of a special type of insurance in order not to kill the romance between you and your spouse.
A prenuptial agreement, also called antenuptial agreement or premarital agreement, is a written contract that is concluded before marriage. It commonly includes:
the terms of possession of assets
treatment of future earnings
control of the property of each party
potential division if the marriage is later dissolved
A prenuptial agreement can help document each spouse’s property or special arrangements between the spouses and reduce conflicts during divorce. It also protects the inheritance rights of children from previous marriage and protect spouses from each other’s debts.
In an interesting blog post by Max Kennerly, Esq., Doing Business on a Handshake, he details a recent case which involved his client being stripped of his ownership interest because he had no formal written contract. Ultimately, the case was won by the client, and he was awarded $4.17 million in damages, however, he was seeking a larger $7 million verdict.
Upon the completion of the trial, Mr. Kennerly was able to discuss the verdict with the jurors, as per Pennsylvania law. The vote had been 10-2 in favor of the client’s claims and Mr. Kennerly was interested in learning more about why the 2 were opposed to the verdict, which he determined was largely due to their young age and inexperience in the corporate world as they both felt that no one would enter into such an agreement without something in writing. The older jurors seemed to think that indeed, sometimes business does work on merely a handshake.
In retrospect, I’m sure that the client in question would have taken the time to have his lawyer draft a formal agreement to enter into with the other owners, which would have saved him time, energy, lawyer’s fees and the hassle of a trial. This is a great reminder from Mr. Kennerly of the importance of having a written, signed agreement before entering into a business relationship.