Tuesday, June 30, 2009

Applying a Prenup in a Probate Estate

Thanks to Wills, Trusts & Estates Prof Blog for Implied requirement of good faith allows beneficiaries to recover

The agreement:

A prenuptial agreement provided that if the husband died first, wife would maintain a valid will giving not less than one-quarter of her entire estate to each of her husband’s three sons. The husband’s will left a substantial portion of his estate to his wife.
What happened next is something lawyers fret over: wife put most of her estate out of the reach of her husband's children.

The Kansas Court of Appeals ruled as followed:
In a split decision, the Court of Appeals reversed the district court. Estate of Draper v. Bank of America, 38 Kan. App. 2d 183, 164 P.3d 827 (2007). The Court of Appeals concluded that the antenuptial agreement did not restrict Ethel with respect to gifting or inter vivos transfers of her property; further, no language in the agreement restricted Ethel from creating irrevocable trusts. Consequently, the panel determined that Ethel complied with the clear language of the antenuptial agreement and did not breach the contract. 38 Kan. App. 2d at 189.

The Kansas Supreme Court reversed and found the prenuptial agreement did create a duty on the part of the wife for the benefit of the children.

Reading the Kansas opinion leaves me with the impression that without the prenuptial agreement, there would have been little money for the husband's children.

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