Prenuptial Agreements

Prenuptial agreements – also called premarital agreements – were once associated exclusively with the very wealthy. That is no longer the case. Today they are a practical tool for a wide range of people, particularly those entering a second marriage, those with children from a prior relationship or those with significant assets or obligations.

One of the most common uses of a prenuptial agreement is to protect children from a prior marriage from becoming disinherited. Before remarrying, each party discloses all assets and obligations and agrees to waive certain rights to the other’s property at death or divorce. This allows your assets to pass to your children from a previous relationship rather than automatically flowing to a new spouse.

Without this kind of planning, even a well-intentioned will may not protect your children. Almost every state entitles a surviving spouse to a portion of the estate unless that right is expressly waived in a valid agreement – even if your will says otherwise. One option for blended families is a Qualified Terminal Interest Property (QTIP) Trust, which allows your surviving spouse access to assets during his or her lifetime, with those assets passing to your children upon the spouse’s death.

Prenuptial agreements can also help keep assets within your bloodline. If you want to ensure that a family home, heirlooms or investments stay in the family rather than being distributed through a child’s divorce, placing those assets in a trust and requiring a prenuptial agreement as a condition of inheritance is one way to accomplish that.

These agreements must be drafted carefully and should involve separate legal counsel for each party. A prenuptial agreement does not signal a lack of commitment – it is a reasonable step to protect everyone involved, particularly children.