Prenuptial agreements are often seen as useful and necessary only if a couple expects to get divorced at some point in the future. This could not be further from the truth. In fact, a prenuptial agreement can be an effective estate planning tool for a couple who remains married “until death do us part.” Here’s how:
When it comes to death (or divorce, for that matter), the law provides certain default rights to husbands and wives. For instance, under state law, even if you try to use your Will to disinherit your spouse, he or she is entitled to an “elective share” of your estate. That is, unless your husband or wife waives the right – in writing – to claim a portion of your estate. Imagine you have children from a prior relationship, you’re marrying someone who is financially independent, and the two of you agree that upon your death, your children and not your spouse should inherit your property. In this situation, a prenuptial agreement allows your spouse to make a written waiver of their right to claim an elective share, and clears the way for your children to inherit all of your property.
A prenuptial agreement also allows you and your future spouse to agree in advance on other important issues. For instance, if you’re a business owner, who should control the business when you pass away? Or, if you have complex investments or substantial property, a prenuptial agreement allows you to sort out in advance what the two of you agree should happen to those assets.
So, if you have children from a previous marriage, or if you are a business owner or the owner of significant assets, you might want to meet with your estate planning attorney to discuss the ways that a prenuptial agreement can benefit you.