When assets are being passed on to children from a prior marriage, trouble can quickly ensue. Having a clear will and a sound trust can help ease tensions. But experts are advising people who remarry to have even stronger asset defenses—prenups and even postnups that are highly detailed and clearly laid out. The message from the experts is simple: You can never have too many documents backing up your intentions.
"The mess comes when you don't have proper estate planning," according to an attorney interviewed in a recent article titled “Remarrying? Shower kids with love, and a good prenup” from CNBC. An important tool in that toolbox, he says, is a prenup. A prenup details how assets would be split up if the marriage fails or a spouse dies. A spouse who wants to protect assets in a second marriage should also talk to an experienced estate planning attorney about trusts.
One of the best features of a prenup is that it can protect nearly every kind of asset an individual may want to pass along—this includes art collections, cash, and the family business. Without a prenup, it’s easier for a spouse to obtain some unintended part of the estate if you die. A prenup should be airtight to avoid legal issues. Although Robin Williams had a well-thought-out estate plan when he passed, which included a prenup and a trust for his children, some of his personal items were left out of the documents. This is causing a fight between his spouse and his children.
Documenting every asset is necessary. Lists of paintings owned before a second marriage can be kept in multiple places, which helps you show evidence of your intentions … and the more detail, the better, especially those items of sentimental value. Once a prenup is signed, it’s nearly unbreakable and is typically accepted by the courts.
The original article gives us some guidelines to keep in mind and to discuss with your attorney:
- Both you and your spouse should understand the prenup, and both should be represented by attorneys.
- Negotiate and sign the prenup prior to your wedding. A common mistake is signing the prenup the day of the wedding!
- After you're married, be careful not to commingle all assets because the source of funds—like joint or separate accounts—used to buy an asset will decided who owns it.
- The more communication, the less misunderstanding. Conduct a family meeting and discuss your intentions for your estate.
Read about more tips in the article and talk to your estate planning attorney sooner to help avoid costly court battles later.
You can learn more about this topic as well as other strategies on our website under the tab entitled: estate planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.
Reference: CNBC (February 12, 2015) “Remarrying? Shower kids with love, and a good prenup”