Prenuptial Agreements as an Estate Planning Tool

Recognizing that prenuptial contracts become scrambled in retirement benefits, a New York appeals court recently gave relief to lawyers who draft the contracts. Even if a former wife challenges the division of a retirement benefit, a man’s original intent for that retirement benefit in case of divorce is valid.

In order to properly keep retirement benefits separate, a document must be signed in addition to the prenuptial agreement. Under ERISA, only a spouse can waive rights to the retirement money, so it is important that this document is signed after the wedding.

Prenuptial contracts are on the rise as more people view them as a necessary estate planning tool rather than just preparation for a failed marriage.

See Arden Dale, Stay Ahead of Your Clients – Prenups and Pensions Can Get Snarled, Financial Adviser Blog, May 21, 2010. 

Special thanks to Jim Hillhouse (Wealth Counsel) for bringing this to my attention.