Do you consider prenuptial agreements only for the fabulously wealthy who are determined to protect their fortune from a future spouse, or the future spouse of one of their children or grandchildren? This has become a common misunderstanding, but prenuptial agreements can actually play a role in estate planning for people in many different financial situations with different family arrangements. In particular, prenuptial agreements may be useful if you or your future spouse is bringing a child from a prior relationship into your new marriage. Let us take a look at two reasons why prenuptial agreements matter to your estate plan if you are already a parent.
1. Your Child Comes First. Chances are, you are only getting married if you feel your new partner is kind and loving toward your child. It is still likely, however, that you want to protect your child financially in the event of death or possible divorce. A prenuptial agreement can help on both fronts. If you and your new spouse were to divorce, a prenuptial agreement might include a provision that you keep whatever assets you brought into the marriage, to preserve your lifestyle for you and your child. Alternatively, if your new spouse significantly raises the standard of living for both of you, a prenuptial agreement might allow for family support to be paid to maintain your child’s home for him or her. With respect to estate planning, a prenuptial agreement could also help ensure your child is provided for in the event of your untimely death. In most states, without an estate plan saying otherwise, your new spouse automatically inherits all or at least a large part of your estate. As part of your estate plan a prenuptial agreement would ensure your child inherits what you want him or her to inherit.
2. You Want to Ensure Your Child is Treated Fairly. If you decide to have more children with your new partner, the standard for estate planning can often be that you would each leave your estate to your biological children. What happens, however, when your first child, or more than one child, is biologically only one spouse’s? This can be an issue that may be addressed by using a prenuptial agreement as part of your estate plan, that specifies that all children would receive the same inheritance, no matter whether you or your new spouse passes away first.
Do you have more questions about how a prenuptial agreement can help strengthen your estate plan? Please reach out to our office to schedule an appointment.