Creating an estate plan when marriage is on the horizon is important in order to protect the interests of both parties entering into the relationship. A prenuptial agreement is one tool that can be used for this purpose. There are also additional tools that can be used as well. In many cases, the prenuptial agreement can be viewed as a starting point that can be added to later.
4 Potential Asset Protection Tools for Use in Marital Estate Planning
What are some of the other options that your attorney may suggest as part of your estate planning when contemplating marriage? The following is an overview:
- Consider a domestic or foreign asset protection trust. Unlike prenuptial agreements, these trusts do not have to be mutually negotiated. Certain assets, such as small business interests, can be placed inside the trust in order to ensure that the asset remains separate after the marriage begins. The asset is transferred irrevocably to a trust that is managed by a trustee.
- Consider a qualified personal residence trust. This trust can be incorporated into the prenuptial agreement and allow for your spouse to stay in your home for a set period of time if you die unexpectedly. At the same time, the house is preserved for the ultimate inheritance by someone else, such as your children.
- Consider a trust to hold retirement plan assets for the benefit of your children. While this option may be useful if you want to protect these assets in the event of a divorce or death, your spouse may have to specifically waive his or her rights to be a beneficiary.
- Consider making a gift of a certain asset to your spouse, giving up rights or income to that asset in the future. This can be done in exchange for something else that you want, such as your spouse waiving a future right to spousal support.
Creating an estate plan prior to entering into marriage requires the guidance of an experienced legal professional who can help you identify potential issues and suggest solutions that will work well for your family. We are here to help. We encourage you to learn more about how we have helped other clients by checking out our client testimonials page today.