Before you can understand why a prenuptial agreement matters to your estate plan, do you know what a prenuptial agreement is? A prenuptial agreement is a contract between two parties who intend to marry. The contract outlines what property the parties agree to be kept as separate, non-marital property and how that property will be divided in the event of a dissolution of the marriage or the death of a spouse. Although it often comes with a negative connotation, entering into a prenuptial agreement does not necessarily mean you do not have faith in the marriage and want to plan for divorce. There may be a variety of reasons why a prenuptial agreement is important, even for marriages that last until death.
A primary reason why couples enter into prenuptial agreements may be that they want to outline how their property will pass when they have children outside the marriage. In most states, you cannot leave all of your estate to your children if you have a surviving spouse. Regardless of what your will says, the surviving spouse typically can elect to disregard the will and inherit up to one-half of the estate, depending on the state’s laws. A prenuptial agreement governing the distribution of assets can help ensure that your property passes to your children and surviving spouse in the proportions that you desire, rather than the proportions outlined in your state’s laws.
Another reason that a prenuptial agreement matters in your estate planning is if you have significant wealth or heirlooms that you acquired before the marriage. Without a prenuptial agreement, those assets become part of your estate that can be inherited by your spouse upon your death. Expressing your desire to leave those assets to someone other than your spouse in your will alone may not be enough because of the rights given to spouses under the laws of most states. Including that information in a prenuptial agreement can help ensure those assets are passed down the way you intended.
If you are marrying, or remarrying, make sure you consult an attorney experienced in these issues so that you can be certain you incorporate a prenuptial agreement into your estate planning, if it is prudent to do so. Our office can guide a family through their estate planning options. Please contact our office today to schedule a meeting with attorney Alan Hougum.
