People often obtain prenuptial agreements to protect the assets they brought into a marriage in the event of divorce. However, prenuptial agreements sometimes contain estate planning provisions that apply even if the marriage is happy and lasts a lifetime. If you have a prenuptial agreement, you need to tell your estate planning attorney about it.
1. What is a prenuptial agreement?
A prenuptial agreement (also called an antenuptial agreement) is a written contract between two people intending to be married that protects their rights during marriage, divorce, and upon the death of their spouse. Among other things, it often defines whether property is separate or marital. For example, a couple might agree that a home owned by one spouse is that spouse’s separate property, but equity acquired (such as paying the mortgage or making improvements) and any appreciation in value after the marriage is marital property. Prenuptial agreements often deal with business interests, ensuring that such interests remain in the respective spouse’s control and pass to that spouse’s children.
2. How does a prenuptial agreement affect estate planning?
A prenuptial agreement can provide a spouse with the right to certain assets upon the death of the other spouse, either explicitly, or by characterizing certain property as marital. Under the example provided above, the surviving spouse might have an ownership interest in the home to the extent of the change in value since the marriage. Some prenuptial agreements require the spouses to create estate planning documents with specific provisions.
Prenuptial agreements are valuable tools in blended family situations to define and protect the property interests of children from prior relationships. A prenuptial agreement can waive a surviving spouse’s right to receive some or all of a deceased spouse’s separate property. It might also provide that a family business passes to the deceased spouse’s children.
3. What if the terms of the prenuptial agreement and estate planning documents conflict?
Missouri courts have found that the terms of a valid prenuptial agreement may prevail over the terms of a person’s estate planning documents to the extent the terms conflict. However, these situations are often complex and should be evaluated by an experienced attorney. If your prenuptial agreement and estate planning documents are at odds, you are leaving the door open for expensive and drawn-out disputes and lawsuits. The best option to avoid potential disputes is to ensure that your estate planning documents are consistent with your prenuptial agreement.