Between 2010 and 2013, the number of prenuptial agreements increased 63 percent, according to a recent article in the Wall Street Journal. The majority of these were used to protect property rights and estate issues.
Children from a prior relationship
If you have children from a prior relationship, you can use a prenup to protect your children's inheritance by outlining how you want your estate divided. Having these agreements determined before you walk down the aisle ensures both parties enter the marriage with a clear understanding of expectations and that the children from the prior relationship will be provided for according to the you wishes. A prenup also can provide a legal shield to protect your children's inheritance from future lawsuits filed against a surviving spouse.
Expected inheritance or trusts
If you expect to gain assets from a trust or inheritance, a prenup can ensure that the inheritance does not fall victim to a division of assets in a divorce settlement or go into probate in the event of your death. Prenups clearly outline the ownership and transfer of those assets so both parties enter the marriage with an understanding. You may anticipate an inheritance with understood familial expectations but those are verbal, not written, understandings. By getting those expectations in writing in a prenup, your can make certain that you are abiding by the understood wishes of your loved ones.
People are marrying later in life than in past decades, and many already own property before entering into the marriage. A prenup can help determine ownership and inheritance of that property. For example, if you own a home purchased in a previous marriage and wants to retain the property as rental income or as a future inheritance for children, a prenup takes care of that negotiation up front so there are no questions down the line.
If you stand to inherit partial ownership or control of a family business, a prenup can ensure that your interest is secure for both yourself and for your loved ones. Determining those business interests before entering into the marriage can help you avoid family disagreements and legal issues in the event of either divorce or death.
Life insurance and retirement income
A prenup can be used to designate life insurance and retirement beneficiaries, as well. Whether there is a certain portion to be set aside for previous spouses, children from a prior relationship, or for a new spouse, a prenup gets that amount in writing.
Alimony and child support
If you've been married before, a prenup is an excellent way to ensure the newest spouse agrees to abide by previous financial obligations that you may have. It can also ensure that, in the event of death or divorce, both parties agree in advance to the terms of support for your spouse or for your children.
Prenups are not just a good idea for wealthier clients. If you are planning to marry, we recommend that you consider the benefits of a prenup to avoid costly and emotional legal problems for yourself and your family.
To learn more about common estate planning issues, check out our free guide, Estate Planning Pitfalls: The 12 Most Common Threats to Your Estate & Your Family's Future, or to discuss your estate planning concerns, please call our office at 919-443-3035 or use our contact form.