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Graying Marriage and Divorce – Part 5: Prenuptial Agreements and Estate Planning

By Deirdre R. Wheatley-Liss, LL.M, CELA

For many couples who marry later in life, it makes sense to very carefully separate the assets each had before the marriage (each keeping those as their own) while also providing a way for them to share some assets going forward. With this type of approach, each spouse waves the elective share (see “Graying Marriage and Divorce – Part 2: Creating a Prenuptial Agreement” for a discussion of the concept of “elective share”) in an arrangement I sometimes call:

Yours is yours. Mine is mine. Ours is ours.

If the couple chooses to buy a new residence and put it into joint name, they both know that whoever lives longer will end up with the property. But their separate assets, if agreed in the prenuptial, can still pass to their respective children or other beneficiaries.

Often people are married for a long time. Because your assets can grow over time, you may wish to give more assets to your spouse than you envisioned at the time you created your prenuptial agreement. That’s not a problem – a prenuptial is not going to prevent you from doing that. It sets a minimum threshold, not the maximum that you're able to give. But in your will, you want to make sure that you reference that there is a prenuptial agreement and spell out the key terms of it which apply to your will.

Also, you want to make sure that your survivors – children, your spouse and/or other beneficiaries – can very clearly see why you did what you did.

Other Important Estate Planning Considerations

Guardianship. As soon as you get married, your spouse has preference to act in certain roles for you, particularly as a guardian. What is that? A guardianship is….

We all know or have heard of people who are suffering from dementia and they did not see their estate planning attorney and they do not have a power of attorney in place, but they are not competent to be making financial decisions. When that is the case, and somebody needs to make financial decisions for them, the way to do that is through a guardianship proceeding with the courts. Under the law, a spouse has preference to be the person who is named the guardian.

In a second marriage situation, however, you may not want your spouse to be named the guardian. If you're keeping your financial affairs separate, you might want one of your children to be making those financial decisions – or one of your children together with your spouse. If this is the case, it’s important to have it written down in your prenuptial agreement.

ERISA. The full name of the law that governs your retirement plan is the Employee Retirement Income Security Act, commonly abbreviated as ERISA. This law governs your 401-K or 403-B and most other types of employer-sponsored retirement plans.

Importantly, according to ERISA, when you die, your spouse is the beneficiary of those accounts unless they have waived their rights in a notarized document saying that they have waived their rights.

This condition does not apply to IRAs. With IRAs, whomever you list as beneficiary is the beneficiary. A spouse does not take precedence over the beneficiary you have designated.

This post is for general informational purposes only. The specifics of your situation could affect the applicability of the information provided in this blog post. For a video presentation of this information, please visit Graying Marriage and Divorce, here. For more detailed information, please visit or contact us for a free 20 minute telephone consultation.

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