Thursday, July 30, 2009

Prenuptial Agreements for the Family

Here is an unpleasant problem: parent's estate planning consists solely of trusting to step-parent to care for parent's children but the step-parent ignores the parent's children after the parent's death. Hard to tell the children that parent screwed up and (usually) nothing can be done- there is such a welling of emotions ranging from incredulity to anger to resentment.

The Golden Scribe's Prenuptial Agreements to Protect the Family does a good job of explaining the problem and its solution:

"One issue that should be addressed in a prenuptial agreement is: who will inherit the couple’s money if both should die? Another important concern to consider and address in a prenuptial agreement is: how will the biological children of one party be affected if that person should die? In other words, if Bill has two kids and he marries Lorie, what will happen to Bill’s kids if he should die? Will Lorie continue to provide for them? Or, will they be left to fend for themselves? Of course, no parent wants the latter for his children.

A step-parent has no legal obligation to care for children after the death of the spouse. Therefore, a prenuptial agreement can ensure that the children of the biological parent are still cared for after the parent’s death. Issues such as inheritance and life insurance, and who the beneficiaries are of both, should be included within the prenuptial agreement. Therefore, a person with children who is getting married should consider a prenuptial agreement in order to secure a strong future for the children."
Now, if we could just get people to listen and act to prevent unpleasant surprises to their children.

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