Pre-Nuptial Agreements: Not Just For Divorces Anymore

Pre-nuptial agreements have been around for many years.  Historically, they have rightly been viewed as a creation to provide assurance to individuals about to enter marriage that their assets would be protected in a manner they deemed fit in the event of a divorce.  To some extent, there has often been attention provided to the issue of couples who had children from previous marriages.   Over the past few decades, though, the pre-nuptial agreement has become an ever increasingly important estate planning tool.

Case in point:  Harold and Mildred, both in their mid-70s and widowed, met one another, fell in love and got married.   Both had adult children from their previous marriages.  Except for a small joint checking account to pay household bills, they maintained their assets in their own names and their Wills left their assets to their respective children.  Principled as they were, they swore that they would not make a claim against each other’s estates when either of them would die.

After 15 happy years of marriage, Mildred died.  Although all of their friends knew that Harold would have honored his promise not to make a claim for any of Mildred’s assets, he was now mentally incapacitated.  Harold’s daughter, Madge, felt otherwise.  She was Harold’s agent under a general durable power of attorney which Harold had executed and delivered to her.

Using the power of attorney, she filed an action against Mildred’s estate for what is known as an elective share.  As a Harold and Mildred were happily married, there was no defense to this action.  In short, Harold’s daughter was legally able to claim one-third of Mildred’s estate away from Mildred’s children.

Because of situations like these, it is imperative for couples who marry later in life to consider a pre-nuptial agreement.  A properly drafted pre-nuptial agreement can define what rights, if any, a surviving spouse has against the estate of their deceased husband or wife.  Often, the agreement is drafted so that both spouses will waive any right to the other’s estate.  Such an agreement does not prohibit one spouse from providing for the other economically.  It removes the expectation of any more than what the agreement provides, if anything.

For such agreements to be valid, they need to be properly drafted.  In doing so, they need to meet at least two criteria.  First, there must be full and accurate disclosure of each party’s assets and liabilities.  Second, both sides must be provided with the right to have the agreement reviewed by independent counsel.  If these criteria are met and the agreement is intelligently drafted, couples can enter a marriage in which their estate planning wishes can be respected.

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