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Traditionally summer is peak wedding season. Good weather, pretty flowers, and lots of vacation time make this time of year the perfect setting for nuptials. While COVID-19 has put a damper on large affairs, weddings are still managing to persevere in untraditional locations. Regardless of how one ties the knot, marriage always involves the the blending of two individuals’ lives, along with their families, assets, and values.
Pre-nuptial agreements are an important consideration for a marrying couple, regardless of their age, net worth, or family disposition. Often people forgo the pre-nup, because of their lack of wealth, young age, or the host of other items they have to deal with before the big day. In the age of COVID-19, many other considerations come into play before marriage. Given everything our society has faced during this pandemic, I maintain that executing a pre-nuptial agreement along with estate planning documents should be an engaged couple’s priority.
A pre-nup is an important document for many reasons, most notably because it dictates the distribution of assets and income in the event of a dissolution of marriage. For those who are not focused on money matters, a pre-nup, at the very least, encourages a couple to talk about their finances, disclose their financial health, and, albeit scary, address various possibilities their marriages may take.
Pre-nups generally focus on the dissolution of marriage, however, they also can determine how assets are distributed upon death. Divorce and death — two topics every engaged couple is eager to discuss. Often a pre-nup will indicate that assets will be distributed via intestacy or by last will and testament, assuming the latter is written. Usually, attention is given to the right of election, which is the statutory right of a surviving spouse to elect against the deceased spouse’s estate in the event she is disinherited. In other words, public policy dictates that you cannot disinherit your spouse. Depending on the state, a spouse, even if not included in an estate plan, can file an election in the probate court to receive a percentage, oftentimes, one-third, of the estate.
For those who marry when they are young, it is possible that the spouses will wish to leave their estates to people other than their new spouse, whom they may not know for a long period of time. Pre-nups will often include waivers to to the rights of election in the other’s estate in favor of parents or other relatives receiving the monies. If it is a second marriage, a waiver may be agreed upon so that the children from another relationship receive without any monies going to the surviving (second) spouse.
Having a pre-nuptial agreement, however, is not a replacement for a last will and testament. When writing the latter, an attorney should inquire as to the existence of a pre-nuptial agreement and use it in her analysis of the estate plan. A last will and testament executed following the execution of a pre-nup will govern, however, one must be wary of waiving his or her right of election. It is possible that a last will will leave a bequest to a surviving spouse but not sizeable enough to the survivor’s liking. If the waiver is executed, he or she will not be able to elect against an estate.
Additionally, attention should be paid to whether a spouse will serve as executor under a last will. Beneficiaries under retirement plans should also be considered. If spouses are not going to serve in those capacities, special waivers may be needed.
With so much to do prior to getting married, a pre-nup is often put off. The idea of speaking with lawyers and discussing divorce and death do not seem to be in the spirit. A post-nuptial agreement, however, is also an option for those who do not get around to the execution before walking down the aisle. Once married, however, relationships undoubtedly change. The longer one waits to concretize an agreement, the more families change and assets may be commingled. Of course, children may be born, thus complicating relationships even more and perhaps lessening the feelings one had with regard to the holding of assets, prior to marriage.
It is important to note that one can revise, in writing, prenuptial agreements if situations change. The same goes for last wills and testaments. Like the execution of a last will, power of attorney, and health care proxy, executing a pre-nuptial agreement is prudent regardless of age, estate size, or family makeup.
Cori A. Robinson is a solo practitioner having founded Cori A. Robinson PLLC, a New York and New Jersey law firm, in 2017. For more than a decade Cori has focused her law practice on trusts and estates and elder law including estate and Medicaid planning, probate and administration, estate litigation, and guardianships. She can be reached at cori@robinsonestatelaw.com.