Most people have a general idea of what a prenuptial agreement is. These documents have become increasingly common in recent years, with many couples choosing to prioritize their careers and assets as they enter a marriage. While it is true that prenuptial agreements are especially useful in the event of a divorce, they also provide other benefits. For example, a prenup can serve as an estate planning tool.
Rozin | Golinder Law can help explain just how a prenuptial agreement can assist when estate planning.
Reviewing Prenuptial Agreements
First, it is important to have a quick review and understanding of prenuptial agreements. This is a document drafted and signed prior to marriage. While considered controversial at some points, they are becoming more normalized. Typically, individuals will associate prenups with couples or individuals that have significant amounts of money or inheritances. However, other circumstances warrant such an agreement, such as having children from a previous marriage or one individual having more debt.
Prenuptial Agreements and Estate Planning
One key component of a prenuptial agreement is delegating assets or property. This is also a key component and driving purpose behind estate planning. However, there are certain limitations to keep in mind in regard to each process.
How Property is Handled in New Jersey
Each state has its own approach to property division and distribution when it comes to estate planning and divorce. In New Jersey, the courts operate under equitable distribution during divorce. This means that while the split of property and assets may not be 50-50, it will be fair according to the unique circumstances of the marriage.
When it comes to estate planning, surviving spouses are entitled to a certain percentage and portion of their spouse’s estate upon passing. In New Jersey, the minimum is equal to a third of the estate. In short, entirely writing a spouse out of a will and estate plan is not an option in the state.
How a Prenuptial Agreement Helps
While it is true that a spouse cannot be excluded from an estate plan, such as a will. However, there are other options that can help individuals stipulate what they do and do not want their spouse to receive upon passing.
This is when prenuptial agreements can come into effect. In most states, the rights that spouses receive are more powerful than what children or even other relatives may have. If an individual knows exactly what portion of their estate they want their spouse to receive, having a prenuptial agreement in place can dictate that. Furthermore, this will help those wishing that their children or other family members will get their appropriate portion of the estate.
So, what can go into a prenuptial agreement?
- Property purchased previous to the marriage.
- Specific assets that belong to children from previous marriages.
- Specific family properties or businesses.
- Existing estate planning wishes to reinforce a will or trust.
- How property distribution should proceed in the event of one spouse’s passing.
- How property distribution should proceed in the event of a divorce.
All of these factors can help support an estate plan.
How to Get Prenuptial Agreements Right
If a prenuptial agreement is not enforceable, then it cannot serve as a supporter of an estate plan. Working with an experienced attorney knowledgeable in both estate planning and prenuptial agreements, such as the team at Rozin | Golinder Law is a good starting point. They can help guide individuals through drafting an appropriate prenuptial agreement that is enforceable. For example, ensuring that the agreement has fair terms, is not signed under duress, and does not include custody discussions.
Needing Help in New Jersey?
When it is time to consider estate planning and you have a marriage on the horizon, it is important to consider just how a prenuptial agreement can help. The team at Rozin | Golinder Law can help discuss your options and determine what will work best for you.
To schedule a consultation with one of our attorneys, call us at (732) 810-0034 or visit us online.