Prenuptial Agreements and Estate Planning Overlap
The use of prenuptial (prenup) agreements in a marriage can have a bit of overlap with your estate planning.
There are laws in every state that protect a surviving spouse’s property rights. These laws were originally enacted to prevent a spouse who did not earn any money from being left without any right to property upon the death of the spouse who was doing all the earning.
In common law states, the surviving spouse has the right to inherit property, while in community property states, spouses have right to any property earned during life. Prenups are used in both situations to limit the rights of the surviving spouse.
As Massachusetts is a common law state, we will focus on the right to inherit and specific issues with prenuptial agreements under common law rules.
Spouse’s Right to Inherit
In a common law state, your spouse will have the right to inherit property from you upon your death if you do not implement a prenuptial agreement. No matter what terms you put into your will, you cannot disinherit your spouse. If you make such an attempt, your spouse can still take the “elective share” of your property, the minimum amount of the estate to which he or she is entitled under the state’s laws.
So, if you live in Massachusetts and do not leave your spouse at least the elective share, your spouse can still take that amount of property, which will reduce the share of the estate your other beneficiaries can inherit.
Using Prenup Agreements
If you implement a prenuptial agreement, you will be able to decide who owns what and the property rights each spouse has upon the other’s death. Any decisions you make and agree to as part of the prenuptial agreement will override existing laws, even laws regulating “elective share.”
This is beneficial if you wish to leave the majority of your estate to children from a previous marriage, and limited amount to your spouse. In such a case, the prenuptial agreement can ask your spouse to waive their right to the elective share of the property.
This is a feature that comes in addition to being able to decide which pieces of property are marital or separate property. This comes in handy should the marriage end in divorce.
Keep in mind that there are certain requirements a prenuptial agreement must follow for it to be valid, including both spouses voluntarily agreeing to its terms, both spouses providing complete and accurate financial information, both spouses being allowed to seek independent counsel and the terms of the agreement being fair. Also, a prenup does not take the place of a will and other estate planning documents; instead it is an agreement as to what provisions can be included in a will and other documents.
For more information about how prenups and estate planning can overlap with each other, contact an experienced attorney at Baker Law Group, P.C.
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