How Do Prenups Affect Estate Plans?

People often think of prenuptial agreements as a safeguard in the event a marriage fails. However, they can also be used in connection with estate planning. Not only can a prenup agreement help to avoid unintended consequences when it comes to who will inherit your property, but it can also outline each spouse’s property rights in the other’s estate. Although prenups and estate plans have very different purposes, they can help ensure your final wishes are carried out when used together.

What is a Prenuptial Agreement?

A prenuptial agreement is a contract that both spouses sign before their marriage. It lists all the property owned by each individual and specifies how it should be treated in the event of divorce. It can also outline the financial rights and responsibilities of each spouse during the marriage and work alongside an estate plan to protect children from a prior marriage.

In order to be valid in Minnesota, a prenuptial agreement must be in writing and voluntarily signed by both parties. It must also include a full disclose of each party’s finances, be signed by two witnesses, and notarized. A prenup agreement will not be deemed enforceable if it is unconscionable or too one-sided.

How Can a Prenup Agreement Work with an Estate Plan?

Prenups are not a substitute for an estate plan — but they can supplement them. Married couples should use both tools to help ensure their estate planning needs are met. For example, a prenup cannot address guardianships for minor children or final arrangements. In addition, prenups only affect property division between spouses, not other family members and beneficiaries.

There are several ways a prenup can work with an estate plan, including the following:

• A prenup agreement can protect children from a previous marriage — If you have children from a prior marriage, a prenup can safeguard their right to an inheritance, regardless of whether a new spouse can claim more than they would be entitled.
• A prenup can specify each spouse’s inheritance rights — In a prenup, spouses can decide who owns which assets and what property rights each spouse will have following the death of the other.
• A prenup can disinherit a spouse — There can be many reasons you might want to disinherit your spouse. For instance, you and your spouse might be estranged, you might want to avoid estate taxes, or your spouse might have a substantial amount of assets in their own name. But disinheriting a spouse cannot be done with a will alone. A valid prenup can allow your spouse to waive their share of your estate.

Similarly, postnuptial agreements can function in the same way a prenup would — except it can be entered into at any point during the marriage, rather than before. A postnup can be signed by a couple who has separated to avoid one of them inheriting the other’s estate in the event of death, before the divorce is finalized.

Can You Leave Your Spouse Out of Your Will?

Disinheriting a spouse is a major decision that can come with significant consequences. Under Minnesota law, if you intend to disinherit your spouse, your will must contain specific language that expressly excludes them. However, even if you attempt to leave your spouse out of your estate plan, they may still be able to claim up to one-half of your estate — depending upon the length of your marriage. To help ensure your wishes are met and your estate plan is structured in a way that will meet your objectives, it is best to execute a prenuptial agreement or postnuptial agreement.

Without a prenup or postnup, the elective share to which your spouse would be entitled is as follows:

• For marriages that lasted between one and two years, the elective spousal share is three percent.
• When a marriage has reached the five-year mark, the elective spousal share is 15 percent.
• At the 10-year mark of a marriage, your spouse could receive 30 percent of your estate.
• Each year of marriage between 10 and 15 years increases the elective spousal share by four percent.

A valid prenuptial or postnuptial agreement can allow you and your spouse to legally disinherit each other. Your spouse can also sign an acceptance to the terms of your last will and testament, even if it includes a provision that disinherits them. In other words, since the elective spousal share is a property right that comes with marriage, your spouse must give their consent to being disinherited in one of these three ways.

Contact an Experienced Minnesota Estate Planning Attorney

Using a prenuptial agreement or postnuptial agreement plan can be essential to ensure your estate planning goals are satisfied. A knowledgeable estate planning attorney can best advise you and assist you with creating a comprehensive estate plan that meets your needs. Located in Maple Grove, Mundahl Law works with clients throughout Minnesota for a wide variety of estate planning matters. To learn more about how we can assist you, or to schedule an appointment, contact Mundahl Law at 763-575-7930.