While most people think of prenups as helping them to prepare for divorce, they can do more than that! Prenups can actually help plan and prepare for the death of a spouse as well. I know what you’re thinking; Isn’t that what wills are for? In short, yes. But a prenup can be a helpful addition to an engaged couples estate planning process. 

Why use a prenup for estate planning? 

In short, a prenup is intended to handle matters in the event of a divorce. However, in deciding what assets are marital/community or separate, a prenup can protect property for children from a prior marriage. 

Every state is different but typically, a certain percentage of a deceased spouse’s estate passes on to the surviving spouse (often referred to as an elective share). Think of this as a right possessed by the surviving spouse, the same way that a spouse possesses a right to potential alimony. Just like alimony, the right must be waived by the person who holds that right. In other words, a husband can’t waive his wife’s right to alimony. The same goes for a spouse’s right to an interest in their deceased spouse’s estate. 

A will is a document in which an individual unilaterally declares how they would like their property to be distributed upon death.  It is not an agreement between two people in which the parties negotiate and come to an agreed upon arrangement. You may see where we’re going here. Because a prenup is a negotiated contract between two parties, it can do things that a will, which is a unilateral declaration, cannot. For example, depending on the state, a husband likely cannot declare in his will that all of his property goes to his children, leaving his wife high and dry with nothing. In this scenario, the wife would likely have to agree to waive her right to her portion of her husband’s estate. How can she do that? Well, a prenuptial (or postnuptial) agreement is one option. 

When a prenup can be helpful in addition to shoring up your estate plan:

• If you have children from a previous marriage 
• If one spouse has significant family money or inheritance 
• Both spouses are financially secure and independent 
• Both spouses want to do something unconventional with their estates

Just to name a few! 

What can your prenup do? 

As we touched on above, a spouse may waive their right to receive an interest in their deceased spouse’s estate. Perhaps prospective spouses have children from a prior marriage that they want to protect. In their prenuptial agreement, they could waive their right to their share of their spouse’s estate to ensure that their spouse’s children receive the entire estate in the event of death. 

The arrangement doesn’t have to be totally black and white either. Perhaps an engaged couple is living in the home of the prospective husband and plan to continue doing so after marriage. Their prenuptial agreement specifies that the separate property of each party will remain separate, including the home they currently reside in. Both prospective spouses have children from a prior marriage and want their entire estate to pass directly to them. So, they each waive their right to inheritance from each other. However, prospective husband still wants to protect prospective wife in the event of his death. As the couple is currently residing in his home, prospective husband can specify that the home goes to the prospective wife upon his death. 

Final thoughts

Prenups are not the end all be all for estate planning. Rather, they are a piece of the larger puzzle.

Many couples decide to embark on the estate planning process shortly after marriage and completing their prenup. Check out Trust&Will, an online resource for everything will and trust related, and to create your estate plan online.

You should always consult with a licensed attorney to better understand how the interplay between prenups and estate planning operates in your state, and with your specific situation.