09 Sep How A Premarital Agreement (Prenup) Can Be A Powerful Estate Planning Tool
The idea of having a premarital agreement (prenup) may seem controversial.
Of course, love is beautiful, but even marriage comes with a lot of uncertainties, and a prenup can be one way to quell some of those fears.
Estate planning documents such as trusts, wills, probates, power of attorney, etc. are necessary. But we’re going to examine how a prenup is a powerful estate planning tool, as well.
What Is A Prenup?
A prenup or premarital agreement is a document which intending couples sign to determine the fate of their assets in the event of a divorce or death.
People may think that prenups are for celebrities or the uber-wealthy, but that is not true.
Prenups are particularly important when a person is going into a second marriage, or where one spouse is much older or wealthier than the other.
What is Estate Planning?
Estate planning involves making plans of what would happen to your assets and any other valuables after your death. It merely determines who gets what.
Various families continue in an endless struggle on who receives a particular asset after the passing of a loved one, but estate planning keeps this at bay.
There are many documents to guide you in your estate plans, including the following:
- Powers of attorney
- Advanced medical directives
How A Premarital Agreement (Prenup) Can Be A Powerful Estate Planning Tool
It is important to note that any prenup must be consistent with the provisions of United States Laws. Some of these provisions include:
- That the document must be in writing
- Full disclosure of all assets and liabilities
- That any previous marriage ended in an annulment or divorce
- That both parties must seek legal advice individually
A prenup becomes a powerful tool in estate planning in the following ways:
- If you get married a second time, especially if you are older and wealthier, a prenup can be a powerful tool in estate planning for the children from your first marriage.
Some states have a community property law which provides that couples have an equal entitlement to their assets if a divorce comes up. A prenup, however, prevails over this provision as the spouse who earns it all takes it all.
You can bequeath all your assets to the children you have from your first marriage using a prenup. Your children would have access to your properties even after your demise, not minding if you are in a second marriage.
- Another way a prenup can be a powerful estate planning tool is when there is a conflict between a will and a prenup in a probate court. In such a situation, a prenup would prevail over the will, after scrutiny by the probate court.
The prenup would take precedence over the will unless the family can prove the invalidity of the prenup. The good news is that your children will receive the proper care and inheritance due to them.
Signing a prenup doesn’t mean that the children you have in your second marriage will not benefit at all from your assets. The prenup merely ensures that the children from your first marriage will enjoy your wealth, too.
- Thirdly, a prenup can serve as a smart tool for estate planning in that you can include provisions for personal commitments. It is possible that before your second marriage, you had other financial obligations you made in different places.
These commitments might be for extended families of the first marriage or projects relating to an organization. You may not want to bring this into the new family you are starting up.
After your death, a prenup covers for such commitments.
Contact Attorney Candice O’Neil For All Your Estate Planning Needs
Remember that signing a prenup and making an estate plan requires the services of an attorney with great expertise. Attorney Candice O’Neil has been helping families through estate planning for years, and she can walk you through every decision regarding your prenup and estate planning documents. Contact Candice O’Neil today.