Estate Plans and Pre-Nups: Not Just For Movie Stars

//Estate Plans and Pre-Nups: Not Just For Movie Stars

Estate Plans and Pre-Nups: Not Just For Movie Stars

Posted by:  Jason T. Johns

George and Ginny had a great marriage, with an extended family to whom they wanted to leave everything when they passed. Unfortunately, Ginny was recently diagnosed with cancer. She began to worry: What would happen if she died before George did, and George remarried? What if the second spouse started pushing to get what Ginny and George had intended would be their children’s inheritance? Neither Ginny nor George – nor their children – much liked this scenario.

Ginny and George should consult an attorney.

An estate planning attorney can help them create trusts designed to leave their property to their children and descendants. The trust could also require that if either spouse were to remarry, the second spouse must sign a prenuptial agreement (“prenup”). In that agreement, either spouse would promise to keep Ginny’s and George’s property separate.

The prenuptial agreement would have to be carefully drafted, to make sure it was fair to both remarried partners. But the advantages would be important. First, the prenup could protect Ginny’s and George’s children from losing their inheritance to a new partner or step-siblings.

Second, the prenup would require each second-marriage spouse to create comprehensive powers of attorney, to avoid guardianship proceedings if either spouse became incapacitated. Third, the prenup would require both spouses to make sure that any new estate plans would not disturb the provisions of Ginny’s and George’s existing trusts.

A prenup should also consider the possibility that second spouses might someday become ill or incapacitated and might need Medicaid assistance to pay for nursing home or long-term care. The government can disregard prenups and, regardless what the prenup says, can count some income and assets against both spouses. The healthy spouse might have to pay for some nursing home costs incurred by the ill second spouse. Ginny’s and George’s estate might also have to be spent on the second spouse’s medical expenses. These are heavy costs that could drain most or all of the inheritance Ginny and George had set aside for their children. Our attorneys are well-versed in elder law and estate planning and know how to protect that inheritance to a significant extent.

Do-it-yourself prenups are not the way to go. These contain none of the provisions needed to plan for Medicaid. They also might not work in community property states where creditors have considerable power to access the property of one spouse to pay the other’s debt. Please give us a call to discuss your options.

Our firm is dedicated to helping our clients and their loved ones work through issues and implement sound legal planning to address them. If we can help in any way, please don’t hesitate to contact our office at (630) 221-1755.

 

This post appears courtesy of ElderCounsel, LLC

By | 2018-10-04T15:10:26+00:00 October 8th, 2018|Elder Law|Comments Off on Estate Plans and Pre-Nups: Not Just For Movie Stars