While many people associate prenuptial agreements with divorce, the reality is that these documents can also play a crucial role when planning an estate. If you have questions about how a prenuptial agreement can be used as an estate planning tool, please don’t hesitate to call or contact a member of our estate planning legal team today for assistance.
A properly and carefully drafted prenuptial agreement can serve a number of estate planning purposes, as it can be used not only to explain how marital assets will be divided in the event of divorce, but can also detail what will happen to an estate in the event of either party’s death. For instance, distinguishing which assets qualify as separate property, and which qualify as marital property can make all the difference when it comes to ensuring that assets are not misclassified in the event of one spouse’s death.
Prenuptial agreements are also beneficial to anyone entering into a second marriage, as they can help preserve the rights of children from prior marriages and can also protect estates from claims made by former spouses in the event of the other party’s death. Generally, surviving spouses have certain rights to a portion of a decedent’s assets. Without a prenuptial agreement in effect, a surviving spouse could receive a larger portion of a decedent’ estate and children from a prior relationship could receive less than the decedent anticipated.
Prenuptial agreements can also be used to designate the beneficiaries of a life insurance policy or retirement fund in the event of the account or policyholder’s death. These agreements can ensure that a certain amount is set aside for children from a prior relationship, previous spouses, or new spouses.
Protecting the Family Business
Prenuptial agreements can also play an important role when it comes to protecting a family business, as they can be used to delineate the rights and restrictions on both parties as it relates to ownership or operation of the business. In fact, prenuptial agreements can be used to protect any family heirloom by making sure that they remain with the side of the family where they originated.
When to Plan Your Estate
Soon to be married couples who have decided to enter into a prenuptial agreement should also consider working on their estate plan at the same time. Taking this step helps prevent spouses from later creating an estate plan and forgetting to disclose the existence of the prenup, which could result in the will or trust essentially destroying the effectiveness of the prenuptial agreement. It’s also a good idea for each party to be represented by a separate attorney who can ensure that both parties’ assets are disclosed and that each understands the repercussions of their actions.
Contact an Experienced Estate Planning Attorney Today
To speak with a dedicated and knowledgeable estate planning attorney about drafting your own prenuptial agreement as part of your estate plan, please contact Orlowsky & Wilson, Ltd. Attorneys at Law by calling 847-325-5559 or by sending us an online message.