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Prenup as part of estate planning for second and third marriages

New Jersey couples that want to ensure that their marriage will revolve around a loving union rather than material assets may find that a prenuptial agreement could ensure the peace of mind required to focus on their relationship. Although a prenuptial agreement may sound very unromantic, couples that get married for a second or third time may use such an agreement as part of their estate planning. This is especially true when an older person with considerable assets plans to marry someone who is much younger.

It is not uncommon for the children of, for example, an older man who plans to marry a much younger woman, to believe that the new bride-to-be is after their father’s money. A prenuptial agreement may set their minds at ease, and the father can ensure that the assets intended for his children will be protected. Similarly, consider an older woman, who is reasonably affluent, marrying a much younger man without assets. In the event of the wife’s death -- with an agreement in place -- the property will go to her children. If the husband has occupancy rights, the wife’s children will receive the property upon his death.

If there are no prenuptial agreements in place for the two examples above, the younger spouse may later get married again, and his or her own future children will inherit the property. Under the equitable distribution law in New Jersey, the general rule is that the spouses must split assets according to “whatever is fair” in the eyes of the divorce court. Couples are free to use their estate plan to record their version of what is fair.

New Jersey couples may need to be reminded that a prenuptial agreement has no bearing on the happiness or the duration of a marriage. It is purely a tool, in addition to estate planning, to protect the interests of each individual, leaving them the opportunity to make the most of their time together while also providing adult children with peace of mind. It is important, though, that such agreements be made with the assistance of counsel for each party to avoid future litigation in the event of one spouse’s death.

Source: thespectrum.com, "'Prenups' important in estate planning", Bo Bingham, July 21, 2014

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