Although I think I have met Mr. Right, should I consider a pre-nup?
Yes, a pre-nup could be just what you need especially if you combine it with other appropriate estate documents after the wedding. Talk with an attorney knowledgeable in both areas of the law so you know the basic pre-nupial requirements for your state of residence and to become educated on what a pre-nup can and can’t do for you in the estate arena. Below are some common pre-nup myths:
Myth #1: Pre-nups are Unromantic Some say asking your intended for a pre-nup is evidence you don’t intend a long term commitment and is a sure way to create a lot of drama and end a good relationship. I believe the willingness to discuss the financial issues involved in forming an ante nuptial agreement shows an open and trusting relationship, because you must fully disclose your assets, income and debt, talk frankly about money and values, especially concerning your future financial commitments to existing family and then come to a mutual understanding in writing. Lets face it disagreements about money and family issues have led to many a divorce, so addressing these matters upfront is an ideal way to be sure you are on the same page as a couple.
That having been said it’s not unusual to feel anxious about bringing up the subject of a pre-nup. I suggest you do so in a neutral place and as part of a broader discussion on your joint financial future or possibly as part of estate planning, not while you are discussing your wedding plans. Clearly don’t threaten your intended or wait to the last minute so your future spouse could allege he was under duress. Love is fragile at first and you may come at this discussion from vastly different points of view. Remember we purchase insurance not because we want our homes to burn, to be in a car accident or get sick, but because if the worst happens one is prepared. Once you two come to a general understanding your respective attorneys can flesh out the details and reduce it to writing. Don’t be surprised if your attorney recommends running a credit check or even performing a discreet background check.
You may want to talk with your adult children about the pre-nup as children have a way of thinking their parents’ money and assets are already theirs and can’t help feeling suspicious about a new spouse. They might raise a good question you hadn’t considered.
Myth #2: No Marital Property Your pre-nup should describe in detail how to create and maintain marital property. Often provisions are made for a life estate in a home and use of most household goods, the purchase of life insurance to handle last debts or loss of income, and how an income stream will be maintained for a surviving spouse.
Myth #3: Pre-nups are Anti-Women. Not so, many a widow or established career woman has significant assets like a house and 401K, an annuity income stream or expected inheritance from parents that she wants to preserve for herself or her children in the event of separation or death of a new spouse. Women can be required to pay alimony, just like men. Independent legal counsel should always be used so each side has a full understanding of the legal terms involved and to ensure there are no wacky provisions, that though parties come from vastly different economic circumstances the poorer spouse will receive at least what is possible under an elective share, and no abuse of a fiduciary relationship occurs. Often pre-nups include provisions to increase assets allocation or the income stream the longer the marriage lasts. Support concerns need to be addressed and resolved as part of the agreement process.
Myth #4: Pre-nups override Medicaid. The State is not a party to your agreement and is not bound by your pre-nup.
For Medicaid purposes all a couple’s income and assets are considered in determining eligibility. If your parents have
entrusted assets to you as part of their VA or Medicaid preservation planning then your pre-nup should address caring
for your parent(s).
Myth #5: Pre-nups can easily be defeated. A general power of attorney naming a new spouse as agent can defeat your pre-nup, just as creating joint accounts can. Therefore your attorney will create estate documents that limit an agent’s authority and reflect the estate plan contemplated in the pre-nup. Having read about litigation concerning the pre-nuptial agreements of Tom Cruise, professional athletes, and Anna Nicole Smith the public is not aware that when independent legal counsel for each party and adequate financial provisions for the new spouse are made, most prenuptial agreements hold solid. Without a pre-nup or a new will created after your wedding your new spouse could claim up to one-half your probate estate.
People in their 50’s or older of even modest means that have family property, a family business or partnership interests, adult children, financial responsibilities to elderly parents and vastly different debt scenarios or significant personal income and assets should consider a pre-nup when planning to remarry.
Disclaimer: Information contained in this column is meant to be of general information on frequently asked questions concerning disability, elder law, estate planning and probate law, and does not contain specific legal advice to a client. No attorney-client relationship is created by reading this column.