The Importance of Prenups for Engaged Couples
Why Should Engaged Couples Have a Prenup?
There is a general delusion that Prenuptial Agreements are used only for the protection assets in case of divorce. Whereas protection is the prenup’s better known purpose, it’s not the only justification engaged couples decide to get a one.
Prenups are a useful device in estate planning. Couples may define which assets are thought of as separate property and which are thought of as shared or marital property. Making this separation prior marriage is vital to prevent individual assets from being misidentified as shared or marital property when a spouse passes away.
In particular, those who are getting married for a second time, those who are getting married later in life, or those who have amassed considerable assets, might want to utilize a prenup to protect their estate for children from past relationships, previous spouses, or other members of the family.
Prenups can also help to stop or prevent conflicts about money and property throughout marriage. Couples that have prenups find there are less disparities as to who is the owner of what, and what is theirs to give away legally.
With the aim of a prenup being fully useful and legally binding, each party is required to fully disclose any assets, property owned, and debts in the prenup agreement.
Dividing Your Estate Without a Prenup
Marrying someone lacking a prenup could make dividing your estate more complex and bothersome since there is a risk that it won’t be distributed in accordance with your wishes.
In impartial distribution/ community property states, you’re not allowed to disinherit a spouse in your Last Will and Testament. Once married, they are automatically eligible to a voluntary share of your estate, in which could be anywhere from 1/3 to 1/2 of your assets, subject to where you reside.
If you decide to leave a minimum of your spouse’s eligible share behind, then your spouse entitled to petition for a higher percentage of the estate. In this situation, if you wanted to specify a percentage to your children from a prior marriage, you might not be permitted to do it without a prenup to hinder your separate assets from turning into a portion of your shared/marital property.
Simply put, a prenup is the only way to hinder your current spouse from getting a larger portion of your estate and leaving much less for your children, or inheriting certain property, like priceless paintings, that you wished to leave to your children.
John is going into a second marriage with his new fiancée Susan. He desires to leave his children from the first marriage a portion of his estate. He has a Last Will and Testament to express his wishes. Nevertheless, a Last Will and Testament on its own is not adequate to guarantee that John’s children receive the inheritance that he wanted them to have.
The reasoning? Being a married, John and Susan’s assets are jointly owned, meaning she is entitled legally to a voluntary share of his estate, while John’s children might possibly be left with less than what John had wanted.
If John devises a Prenuptial Agreement, he can list the property he obtained prior to meeting Susan as separate. This enables him to distribute that property to anyone he wants, including his children. Susan wouldn’t have any rights to it only if he wanted to leave her particular assets in his will.
Community States and Marital Property
The following are community property states:
- New Mexico
Marital property in these states are divided equally among spouses. Property obtained prior to marriage is thought of as separate. Due to this distinction, you are legally enabled to leave your share (fifty percent of marital property and all individual property) to anyone you wish.
Your Last Will and Prenup
A Last Will and Testament is documentation that stipulates who will get your assets after your passing. Preferably, it should work in conjunction with a Prenuptial Agreement prior to the marriage to safeguard your individual property.
Make sure that your prenup and Last Will and Testament are unchanged with your current wishes to hinder any future misunderstandings between your beneficiaries.
Like with every major life event, a second marriage calls for you to review your Last Will and devise a prenup to designate who will be entitled to your property after your passing.
Always be sure your Last Will and Testament is reflected upon your current situation and is up-to-date following the ensuing life events:
- Childbirth or adoption of a child
- The passing away of a beneficiary or an executor
- Marriage or separation
- Birth of grandchildren
- Significant illnesses or a surgery
- Increase or decrease in assets or debts
After you have completed the documents, keep them in a secure place, like in a safe, a safety deposit box, or with your attorney.
Prenups, Protection, and Contentment
Prenups provide financial safeguarding to each party in the case of divorce or death. Whereas many individuals relate a prenup with divorces, it is probably the most responsible and sensible thing engaged couples could do prior to exchanging vows to ensure your family and spouse will be cared for in the event something happens to you.
Above all, getting into a marriage with a straightforward understanding of one another’s finances can help couples to develop a firm marital foundation since there are less conflicts related to money, and rather, a strong harmony based on honesty and contentment.
- Prenuptial Agreements and Estate Planning. (n.d.). Retrieved September 25, 2020, from https://www.lawdepot.com/law-library/family-articles/prenuptial-agreements-and-estate-planning/?loc=US
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