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Is there an alternative to using a prenuptial agreement when updating my estate plan? When entering into a second marriage, it is important to modify your estate plan to reflect your change in circumstances. Without doing so, your assets may pass to the wrong individuals after your death. In addition, disputes may arise during estate and trust administration. One way to update an estate plan prior to marriage is to incorporate a prenuptial agreement. However, a domestic asset protection trust may be an appealing alternative to some people.

7 Reasons to Consider a Domestic Asset Protection Trust Rather Than a Prenuptial Agreement

Why consider using a domestic asset protection trust when modifying your estate plan prior to a second marriage? The following are seven reasons:

  1. Domestic asset protection trusts do not have to be mutually negotiated to be valid.
  2. Domestic asset protection trusts can help ensure that property remains separate even after a marriage begins. The property is transferred irrevocably to a trust that is then managed by a trustee.
  3. Domestic asset protection trusts do not have to be considered “fair” at the time of signing and enforcement.
  4. Domestic asset protections may avoid the difficult emotional conversation of asking a spouse to sign a prenuptial agreement prior to marriage.
  5. Couples do not have to fully disclose their total net worth prior to signing a domestic asset protection trust.
  6. As long as the settlement of the trust does not violate fraudulent transfer laws, domestic asset protection trusts are effective against the creator’s future spouse as well as other creditors.
  7. If the marriage ends in divorce, the assets in the domestic asset protection trusts are shielded from the other spouse during distribution of the assets.

Is there an alternative to using a prenuptial agreement when updating my estate plan? For more helpful tips about creating, modifying, and implementing estate plans, we encourage you to sign up to receive our free newsletters today.

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Due to the CoVid19 virus California has issued a Stay-at-Home order. We understand how important the health and safety of our clients, and our staff is. We are complying with this order by continuing to work from our homes. While we are not in the office, we are still here to answer your questions, conducting consultations for review, and initial appointments by phone and email during normal business hours. We know that in this time, more than ever, it is important to have peace of mind about your estate planning. We are here to help you through this. Call our office number or email us and we will respond as quickly as possible.