The consideration of a prenuptial agreement has long been considered distasteful by many. Most believe the focus of a prenuptial (or premarital or antenuptial) agreement is to plan solely for what happens if the marriage ends in divorce. However, many prenuptial agreements are written for estate-planning purposes. An agreement can cover both the event of a divorce and the event of the death of a spouse.
As people marry later in life and have accumulated assets, have children or have grandchildren from a prior marriage, it is important to understand that upon marriage, a spouse automatically acquires certain property rights in the assets of the other spouse in the event of death.
A spouse has rights in qualified retirement assets, is entitled to a $25,000 survivor’s allowance in an estate, and has the right to file for an election against a spouse’s Will, etc. Even if your Will leaves the majority of your assets to your children or grandchildren, your spouse may be able to use his or her right under the law and file an election against the Will for a greater share than you intended.
However, these rights can be waived or modified in an agreement. A prenuptial agreement discussed and agreed upon in advance of your marriage allows you to provide for your spouse and your children or other intended beneficiaries in the manner you choose.
Waiting until just before the wedding to whip out an agreement for signature is never the right way to go about it. Proper agreements require planning and disclosure of information. Once complete, they can serve as an important part of an estate plan to provide for distribution of assets such as business interests, investment portfolios and retirement assets so that there is a thoughtful distribution of these assets after the death of a spouse.
Anne Hensley Poindexter, Partner
CAMPBELL KYLE PROFFITT LLP
Cheri – would you please drop in the full byline? Thanks.
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