Prenuptial Agreements as an Estate Planning Opportunity

Prenuptial agreements used to be for the rich and famous but have recently become more common among baby boomers as an estate planning opportunity. As a result of the financial crisis, boomers have become more anxious to hang on to everything they have. Further, it is more common for people to get married later in life when they have substantial assets or children from a previous marriage. Although prenuptial agreements as well as divorces are more common, talking about signing a prenuptial agreement with your soon-to-be-spouse is still no easy task.

In order to make it more likely that a court will uphold your prenuptial agreement, follow these tips:

• Discuss and draft your prenup months before the wedding date. If a court finds that a prenup was signed under a rushed or ill-informed situation, it can choose to not enforce the contract.
• Do not use fixed-dollar amounts. That strengthens arguments regarding inflation or the substantial decrease in property value.
• Don’t hide any assets. If you do so, you lose credibility with your spouse and the judge.
• Don’t include any provisions that violate state law or public policy because it won’t be enforced.

See Mary Pilon, I Love You, You’re Perfect, Now Sign Here, W.S.J., July 3, 2010.

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