Understanding Prenuptial Agreements for Estate Plans
Discussion of the prenup seems to abound, surrounding celebrity and other high-profile marriages. From a legal perspective, what exactly is a prenuptial agreement and how can you add one to your estate plan?
As the term itself suggests, a prenuptial agreement is an agreement, or more accurately, a legal contract, entered into before a couple marries. It can provide for the division of a couple’s assets in the case of divorce or death and typically sets forth that all premarital assets remain separate property.
Can You Add a Prenup to Your Estate Plan?
Before executing a prenuptial agreement, it is often preferable for each soon to be spouse to obtain his or her own attorney to represent their individual interests. Each of them should make a full disclosure of all assets, including current assets and anticipated future assets such as an inheritance. Projected increases in income should also be considered.
Fairness should be a core principle in determining whether or not a prenuptial agreement will be enforced in the future and may be the primary reason that each side should retain his or her own attorney. The prenuptial agreement usually waives alimony but provides some type of a payout upon the end of the marriage. Child support can never be waived via a prenuptial agreement. Fairness also generally dictates that the longer a couple is married, the larger the payout the spouse with fewer assets receives. For example, if a wife stays home to raise three children, while the husband builds his technology company, she may be entitled to a larger payout, if they divorce after twenty years.
The Benefits of Adding a Prenup to Your Estate Plan
If the marriage ends by the death of a spouse, rather than divorce, the prenuptial agreement can allow separate property to be left to whomever the deceased spouse elects, while also providing for the living spouse.
Prenuptial agreements can actually strengthen a marriage, as they force a couple to have important conversations. Nonetheless, discussing the end of a marriage, which has not yet begun, is a touchy subject and should not be sprung on a partner in the midst of wedding planning. It should be respectfully discussed long before that and may require the assistance of a therapist or other neutral party.
Contact The Law Offices of Clifford M. Cohen Today!
For more information on prenuptial agreements and the benefits of adding one to your estate plan, please call the Law Offices of Clifford M. Cohen at (202) 895-2799 to schedule a time to meet.