Following our last post regarding the young professional and estate planning, we move forward to a different stage of life to begin a series on the importance of estate planning in marriage. During this three-part series, we will introduce key points relating to nuptial agreements, and certain estate planning issues that may arise if divorce occurs.
It is not uncommon for one entering into a marriage to have children from one or more prior relationships. The struggle to protect the inheritance rights of children from prior marriages in the event of death or divorce is a major concern for many and often the driving factor in their estate planning. Often, couples enter into prenuptial agreements to shield children from prior relationships from being financially affected by a new marriage.
In its simplest form, a prenuptial agreement is a contract entered upon marriage. The particular contract, executed prior to the marriage ceremony (preferably well in advance of the nuptials), can include certain details relating to spousal support and/or the division of assets in the event of divorce or death. In Tennessee, to be binding both parties must, with the guidance of separate independent legal counsel, willingly agree to the prenuptial agreement and fully disclose their assets and sources of income.
The main benefit of a prenuptial agreement is that it affords both parties an opportunity to carefully outline support obligations and any specific distributions of significant assets in the event of divorce or death. Not only is a prenuptial agreement helpful in protecting children from a previous relationship, but also in protecting one’s separate assets brought into the marriage and/or earned during the marriage. Business owners may desire a prenuptial agreement to ensure that their hard work does not fall under the control of an estranged spouse. Likewise, individuals who have inherited wealth often desire a prenuptial agreement to ensure inherited assets remain in the family for their descendants.
Prenuptial agreements can be helpful in making sure that one party is not responsible for paying the debts of another if the marriage ends. Another disadvantage of not having a prenuptial agreement is that a surviving spouse may have certain statutory rights which could allow them to thwart an estate plan which provides for children from prior relationships.
If you are entering a marriage and feel a prenuptial agreement could be beneficial to you, do not hesitate to consult with an attorney experienced in such matters.