Oh, you’re getting married – did you sign a prenup? Not a very romantic topic, however, a topic that couples should strongly consider tackling before saying “I do”. The San Luis Obispo attorneys at Towes Law Group, Inc. are releasing information that describes how a prenuptial agreement, integrated with a well-designed estate plan, can protect each partner’s interest in their individual assets in case of divorce or even death.
A prenuptial agreement (or postnuptial agreement if signed after the date of marriage) can be a useful tool for parties who may be entering their second (or more) marriage or when one or both of the partners have accumulated significant assets before marriage. A prenuptial agreement helps confirm how assets they have before marriage will be treated in the event of divorce or death, and how assets are acquired during the marriage will be managed and characterized.
A prenuptial agreement is a written document that must follow specific rules in order to be operative, thus, seeking the advice of an experienced attorney is imperative. Coupled with a well-thought estate plan, a prenuptial agreement should consider such topics as:
- What is the character of each person’s assets and debts (separate vs. community property) and will those characters change over time?
- What happens if community property assets are used to the advantage of the separate property of the other (or vice versa)?
- How will the couples estate planning incorporate the passage of separate and community property assets?
- What happens if we commingle assets?
- How will retirement benefits be classified in the future?
- How will we manage household expenses and other debts?
- How will our marriage and assets be distributed, if at all, to children of prior relationships?
- Can my spouse continue to use my separate property after I die for their lifetime?
A prenuptial agreement can be amended or terminated during the marriage OR if no agreement was in place prior to marriage, you may want to consider establishing a postnuptial agreement that can address each of the above-referenced topics and more.
Estate plans should always be reviewed periodically especially upon the following events:
- The birth or adoption of a child
- The death of a beneficiary or an executor
- Marriage or separation
- The birth of grandchildren
- Major illnesses or a surgery
- Increase or reduction in assets or debts
When reviewing such plans, it is critical that your attorney understand and review any pre or postnuptial agreements that may exist in order to make sure your plan compliments any agreements already in place.
A properly designed estate plan can avoid prolonged and unnecessary court action, make sure a trusted person is named to handle your health and finances in the event you become incapacitated or die and make sure assets are transferred according to your wishes. The attorneys at Towes Law Group, Inc. are ready to help.