How Modern Couples Are Using Prenups for More Than Just Divorce
Prenuptial agreements, often called prenups, are becoming a normal part of getting married. In the past, talking about money before marriage was sometimes seen as a taboo topic. Today, things have changed. More than half of engaged or married Americans under the age of 45 have signed a prenup. This is a jump of 11 percentage points over a two-year period, showing that these agreements are now a mainstream choice.
Traditionally, people signed prenups to protect their money and divide assets in case of a divorce. However, legal experts say the purpose of these documents is growing. More couples are now using prenups as part of their estate planning. This helps protect partners if one spouse passes away or becomes too sick to make decisions.
Planning for the End of Life and Illness
While many people associate prenups with divorce, the reality is that most marriages end because of death. Before a spouse passes away, there is also often a period of illness or incapacity. Yet, many traditional prenups only prepare for a split, leaving couples unprepared for these other life events.
When a spouse dies, state laws can give the surviving partner automatic rights to the couple's property. These laws can override a written will. This means assets might be divided in a way the deceased person did not want. For example, children from a previous marriage could end up with very little because the new spouse automatically inherits the property.
State laws can give a surviving spouse automatic claims to as much as half of the estate unless those rights are formally waived. A prenup allows couples to waive these automatic rights so that their money and property go exactly where they want them to go.
Understanding State Laws
Every state has different rules about marriage and property. It is important to research local laws before making an agreement. If a couple moves to a new state later in life, a prenup can protect their original wishes. Here are a few common state laws that a prenup can address:
- Homestead laws: These laws can automatically transfer a home to the surviving spouse, or allow them to live in the house for the rest of their life. Children may only get the home after both partners have passed away.
- Elective or forced shares: This rule guarantees that a surviving spouse gets a minimum percentage of the estate. It prevents someone from completely leaving their spouse out of a will.
- Family allowance: This provides immediate, short-term financial support to the surviving spouse and minor children. It helps pay for basic living needs while the court processes the estate.
Protecting Assets During a Serious Illness
If a spouse becomes very sick and cannot make decisions, a prenup can help. It can lay out instructions on how money should be spent on medical care. It also defines what belongs to each person versus what is shared. This prevents the entire family savings from being used up before other planned gifts can be given to loved ones.
Why You Still Need a Will and Power of Attorney
Having a prenup does not mean you can skip other legal documents. A prenup and a will must work together. While a prenup decides who owns what, a will explains how those items should be given away after death. If these documents do not match, family members may end up in court fighting over the estate.
It is also important to remember that a prenup is just a promise. It does not automatically transfer property. For example, in a legal case involving the widow of actor Malcolm Jamal Warner, the promised life insurance was never purchased, the beneficiary was not updated, and the trust was not changed. Because of this, the surviving spouse had to go to court to get what was promised in the prenup.
Additionally, a prenup cannot do everything. It cannot:
- Name the person who will manage your estate after you die.
- Choose a guardian for your children.
- Name a person to make medical or financial decisions for you if you become too sick.
These jobs are handled by wills and powers of attorney.
Keep Your Plans Up to Date
Many people make the mistake of writing a prenup and never looking at it again. However, laws change, families grow, and financial situations shift over time. Procrastination can be dangerous. It is best to build a prenup and an estate plan together, and then review them when major life events happen, such as getting married, having a child, or moving to a new state.