By Bobby Feisee, Ashburn Estate Planning Attorney
With divorce rates reaching over 50 percent in the United States, more people decide enter into a prenuptial agreement before they get married. These agreements are especially common with families composed of children from a previous marriage or relationship.
A prenuptial agreement is a legal document that is agreed upon and signed by both parties before marriage. A thorough agreement should fully disclose the financial assets of both you and your spouse. For example, savings accounts, stocks, interests in trusts and estates, and so forth. Prenuptial agreements also deal with any real estate that the two of you may own. Once all of the necessary information, is disclosed the agreement will specify how everything would be divided between the two of you in the event of a divorce or upon death. Another issue a prenuptial agreement can help clarify is if there will be any alimony or support and what happens in the event of a death.
Many people are under the mistaken belief that a prenuptial agreement can only come in handy when dealing with divorce. However, a prenuptial agreement can be used to clarify the rights and responsibilities of both spouses if a sudden loss of life occurs. Another advantage of having a prenuptial agreement is that, without such an agreement, your spouse may have the authority to nullify your existing estate plan by “electing” to take a statutorily defined percentage of your estate. For example, if you decide to leave your spouse 10 percent of your estate and have the rest of your estate go to your children, your spouse still has the authority – absent a prenuptial agreement – to challenge this allocation. The power to “elect” and receive a percentage of your estate is established by state law and can only be waived by an informed and signed waiver, which is routinely contained in a prenuptial agreement.
So, as mentioned above, if you want your home or other assets to go to your children (that includes children from a previous marriage), and not your new spouse, a well-crafted prenuptial agreement can make this happen. Let’s say, for arguments sake, you have children from a previous marriage and your new spouse also has children from another marriage. If you not have a prenuptial agreement, then your house and other assets could easily be passed to your new spouse’s children leaving your own children without the expected inheritance.
An option that is available to you is to set up a trust that will provide income to a second spouse but will then pass the bulk of your estate to your children from your first marriage.
To discuss this in more depth, contact an experienced Ashburn estate planning attorney with our firm.
About the Editors: InSight Law is an estate planning firm in Ashburn, Virginia (VA). The firm’s areas of practice include estate planning, business planning, trust and probate administration, assisting veterans and their family members with obtaining benefits, and medicaid planning. If you have questions, don’t hesitate to contact our office at 703-654-6019. We’re here to help.