Saturday, April 18, 2009

Prenuptial Agreements, Post-Nuptial Agreements and Estate Planning

Some good sense and good advice from The Wall Street Journal on using post-nuptial and prenuptial agreements as estate planning tools.

The Right Steps
A lack of frankness can have dire consequences -- ranging from the litigious (children from a first marriage sue for a portion of the estate) to the emotional (the estate sows division among family members) to the practical (the estate doesn't provide for a partner or child as intended). Estate planners say it's essential for heads of blended families to communicate openly and honestly about each spouse's priorities. A trusted financial adviser or other counselor may help facilitate those conversations.
Prenuptial agreements often are criticized for fostering mistrust and paranoia between couples. But for parents entering a second or third marriage, a prenup can be an efficient way to specify which assets are considered marital property and which are not -- thus offering a way to protect the rights of each spouse's existing children.
Couples who already have blended their families might consider establishing a postnuptial agreement, which can cover much of the same ground. "Some retirement plans require a spouse's consent in order to give the plan's assets to anyone but that spouse," adds Mr. Chasen. "A postnuptial agreement is a great place to provide that consent in a manner that is legally enforceable."

In either situation, each party should hire an attorney to represent his or her interests, and to ensure that the agreement will be enforceable in the case of divorce or death. "All a pre- or postnuptial agreement means in this situation is that you want to make sure your children from a prior marriage are protected," says Mr. Chasen. "It absolutely does not mean you distrust your spouse."

Remember, if you want more information about retaining me for a case, please give me a call at 765-641-7906.

No comments: