Klenk Law

What good is a prenup? My father says I need a prenup, but I don’t own much.

Posted on Wed Oct 7, 2015, on Estate Planning

Even though you do not have much now, your father is likely worried about what you will inherit from him and what you will earn in the future. I would imagine your father has witnessed what appeared to be happy marriages that descended into warfare. He is trying to help you avoid some of that pain if your upcoming marriage doesn’t work out. The advantages of Prenuptial Agreement are coming to an agreement with your business partner/spouse now about financial decisions while you are still friends. And I mean business partner, because your marriage is very much like a business with assets under management and real liabilities if the arrangement fails.

Some examples of what can be addressed in the prenup include clarifying that all inheritances and the growth in value on them remain separate property (that is what your dad is likely worried about). You can also address alimony payments and how to divide up your marital property if you divorce. Once you marry, your spouse has a right to claim a portion of your estate at your death. This is called the spousal election. So even if you keep your future inheritance separate, and give those assets to your child at your death through your Will, without a prenup your spouse can still claim a portion.

This right can be waived in a prenup, so you are free to leave your inheritance as you wish. You might say that you would give this money to your spouse anyway, but after you have children and realize that if you die your spouse will likely remarry, you may instead wish to leave your family inheritance in a trust for your spouse and children out of the reach of her future husband. Working out the prenup and talking openly about your assets with your spouse is usually a good idea.

If you have any other questions about estate planning, feel free to contact our office for a free consultation.

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