Chasing Divorce Assets, Part 3

Defending and Attacking Prenuptial Agreements

This four-part blog series addresses the sourcing of money and property in divorce proceedings to discover hidden assets and income, distinguish separate property from marital property and enforce or attack prenuptial agreements.

Defending and Attacking Prenuptial Agreements

If the objective of a prenuptial agreement is to define and protect separate property, an effective one must anticipate and address future opportunities for comingling, transmutation, and retitling separate property.

For instance, many couples enter marriage after cohabiting in a residence owned by one of them.  Once married, they may wish to convey the premarital residence into joint names for estate planning (survivorship) and asset-protection (entireties) purposes.  Yet, they might not want the conveyance to be treated as a gift to the marriage, converting the residence into marital property.  Often, the owner may want to preserve not only the initial value of the residence, but also the appreciation derived from market gains, improvements, and mortgage payments.

Even when parties sign a prenup and agree to keep their separate property and its appreciation separate, financials can become convoluted and tracing may be required.

Say a spouse withdrew money from a nonmarital savings account, deposited it into a joint checking account and wrote a check to capitalize a business whose stock was issued in the individual name of the spouse. Would the business be marital or separate?  Was the deposit of separate funds into a marital account a gift to the marriage, comingling, retitling, or a mere conduit?

Family law practitioners often encounter prenuptial agreements that contain ambiguities, leaving room for interpretation, defense, or collateral attack. Ensuring your prenuptial agreement is comprehensive and considers a myriad of possible financial scenarios to safeguard separate property in the future is important.

Learn more about prenuptial agreements in our blogs. To discuss the specifics of your finances and prenuptial agreements with an experienced family law attorney, call Pollock Begg at 412.471.9000.

About the Author

With an MBA and more than two decades of experience handling complex financial affairs, Partner Brian C. Vertz excels at cases involving assessment of personal assets including premarital wealth and trusts, valuation of closely held businesses, executive compensation, medical and dental practices, and complex child support litigation. Brian was selected as the Pittsburgh 2019 Lawyer of the Year for family law through The Best Lawyers in America peer review process.

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