Would you sign a pre-nup?

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sassy411 Posts : 52 Registered: 8/16/10
Re: Would you sign a pre-nup?
Posted: Aug 30, 2010 10:28 AM Go to message in response to: auntofthebride

Actually, distribution of assets/liabilities on death is a function of probate laws. In the US, it's crucial to have a living trust that spells out exactly how everything is to be distributed. Otherwise, the surviving spouse is at the mercy of the state's probate laws & probate lawyer$.

A pre nup, upon death of a spouse could get tangled up in probate.

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auntofthebride Posts : 9,354 Registered: 4/2/06
Re: Would you sign a pre-nup?
Posted: Aug 30, 2010 11:23 AM Go to message in response to: sassy411

Dear Sassy,

"A pre nup, upon death of a spouse could get tangled up in probate. "

Again, I'm going by the experience of my father when he married my step-mother, then passed away a few years later.

Their pre-nup outlined what they would do, post-marriage, in their respective wills. They did not change their wills until after the marriage was a done deal. Any engagement can be called off, even on the morning of the wedding. It would be dumb to change a will before the wedding was complete.

The pre-nup basically said "Assuming we get married, after marriage we will write wills according to this plan... In the event of divorce..."

Had the marriage been called off, the pre-nup would have been trashed.

They did, in fact, get married, then after the honeymoon and after they had a few months to get re-settled, they went to their respective lawyers and wrote wills that followed the guidelines in the pre-nup. "Here, Mr Lawyer, read the pre-nup and write a will that follows this."

In the state where my father and step-mother lived and died, Probate is not a big problem. My father's will was probated within a few months. A trust was established for my step-mother, then later after her death, the trust was dissolved (again in Probate Court, efficiently) and the money conveyed to me and my brother, 50:50. My step-mother's own assets, whatever they were, were conveyed to her one adult granddaughter.

I know for a fact that in my father's state, the probate process took about two months, and was relatively painless.

In the state where I live now, Probate Court is an incredibly inefficent process, taking 18 months, on average, and costing a fortune in legal fees. That is totally different from my father's state. Here, in my state, a revokable living trust is the way to go as it does avoid Probate Court. The beneficiaries get their money a lot faster than if a will is probated. My husband and I have a revokable living trust as our estate planning instrument.

This is all very state-specific.

I've said this before, and will say it again. If an engaged couple has significant assets and/or children from a previous marriage, they are both well advised to talk to their own (separate) lawyers about a pre-nup. Because the pre-nup would involve estate planning decisions, the lawyer would in the same meeting discuss the pros and cons of a will or a revokable living trust in light of the laws of that state. Once the pre-nup is signed, it becomes a roadmap for estate planning in the event the marriage ends in death OR a document guiding a divorce court in the event the marriage ends in divorce.

My husband and I were both asset-free college students when we got married. Neither had children from previous relationships. There was no need for a pre-nup for us. There was a serious need for a pre-nup with my dad (father of two adults and grandfather of five) married my stepmother (mother of two adults and grandmother of one).

If you have existing children, it is your duty to protect your children in the event of a greedy step-parent should something happen to you. The nightmare scenario would be for the children's step-parent to get ALL your assets and leave your children with nothing.

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PharmToxGirl Posts : 5,446 Registered: 8/30/07
Re: Would you sign a pre-nup?
Posted: Aug 30, 2010 11:46 AM Go to message in response to: auntofthebride

If you have existing children, it is your duty to protect your children in the event of a greedy step-parent should something happen to you. The nightmare scenario would be for the children's step-parent to get ALL your assets and leave your children with nothing.

This happened to a friend of mine/is happening to a friend of mine.

 

 

 

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sassy411 Posts : 52 Registered: 8/16/10
Re: Would you sign a pre-nup?
Posted: Aug 30, 2010 12:37 PM Go to message in response to: auntofthebride

Probate here in California is a nightmare of the highest order. Messy, slow & outrageously expensive. That's why a living trust is crucial. Not in lieu of but along with a valid pre nup.

If you went thru probate in CA with a pre nup, it would be very easily challenged. Wills can be a problems as well, which is why the trust is so valuable.

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PharmToxGirl Posts : 5,446 Registered: 8/30/07
Re: Would you sign a pre-nup?
Posted: Aug 30, 2010 1:28 PM Go to message in response to: sassy411

Gees I've never even heard of a living trust. I know my neighbors' kids ended in probate with her death but that was because she had no will or anything. I'm not sure about VA and probate with wills. Guess I need to look into that. We have our wills done, but nothing about a living trust.

 

 

 

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sassy411 Posts : 52 Registered: 8/16/10
Re: Would you sign a pre-nup?
Posted: Aug 30, 2010 2:56 PM Go to message in response to: PharmToxGirl

Your wills can be incorporated into your trust. The trouble with wills is that they are open to challenge & interpretation. Once the person dies, the will has to be filed with the probate court & the judge has to oversee the distribution. That means having a probate lawyer, proper notice to potential heirs, etc. Don't know about other states, but in CA, it's long & very expensive. Wipes out a lot of estates just paying probate costs & attorney$.

With a trust, title to the assets never changes hands, thus the court doesn't get involved. Assets are owned by the trust & you decide who will manage them upon your death. That person is the trustee, but not the owner of the assets. Everything remains in the trust, the only changes are to who is trustee.

You also want an advanced health care directive in your trust. Basically, it states your wishes in terms of whether you want to be kept alive artificially & gives someone of your choosing the power to make medical decisions if you can't as well as manage your finances.

Wanted to add that if you're in the US, you may want to look at Legal Zoom. I am a huge fan, have used them many times.

Edited by: sassy411 on Aug 30, 2010 2:57 PM

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PharmToxGirl Posts : 5,446 Registered: 8/30/07
Re: Would you sign a pre-nup?
Posted: Aug 30, 2010 3:10 PM Go to message in response to: sassy411

You also want an advanced health care directive in your trust. Basically, it states your wishes in terms of whether you want to be kept alive artificially & gives someone of your choosing the power to make medical decisions if you can't as well as manage your finances.

Did that and POA as well. My husband works in law enforcement and they had a 'Wills for Heroes' day, so we were able to get everything done for free - which was nice. Just never heard of the living trust before.

And, as long as everything goes well - we're going to have to redo everything anyways as we're expecting. So now is the time to look into things as we'll have to make changes soon regardless.

So thanks for the info!

 

 

 

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sassy411 Posts : 52 Registered: 8/16/10
Re: Would you sign a pre-nup?
Posted: Aug 30, 2010 3:17 PM Go to message in response to: PharmToxGirl

Ahhhh, good point about the POA, I left that out! That is important.

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auntofthebride Posts : 9,354 Registered: 4/2/06
Re: Would you sign a pre-nup?
Posted: Aug 30, 2010 3:41 PM Go to message in response to: sassy411

Dear Sassy,

"Probate here in California is a nightmare of the highest order. Messy, slow & outrageously expensive. That's why a living trust is crucial. Not in lieu of but along with a valid pre nup."

True. Totally true.

The Financial Planners in my company advise clients who are California residents to go with the revokable living trust, for sure, and to consult an attorney licensed in California for full estate planning advice.

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auntofthebride Posts : 9,354 Registered: 4/2/06
Re: Would you sign a pre-nup?
Posted: Aug 30, 2010 3:50 PM Go to message in response to: PharmToxGirl

Dear PTG,

"My husband works in law enforcement and they had a 'Wills for Heroes' day, so we were able to get everything done for free - which was nice. Just never heard of the living trust before."

If you live in a state, such as the state where my father lived, probate could be fairly easy with no particular need for the living trust. In my state, as in California, probate is difficult and expensive, thus a living trust makes sense.

The bottom line is this:

If you have significant assets and/or children before you get married, then a pre-nup is good so there are no surprises at estate planning (will or living trust) time after marriage. You are not faced with a husband suddenly saying "Hey, I don't want your rotten children to get a single dime of my/your/our money.". The pre-nup is just a legal bridge between before marriage promises and after marriage actions. It does not take the place of a proper will or living trust.

Once you are married and especially if you have children in the marriage, you need to see an attorney in your state who can best advise you on the pros and cons of various estate planning issues. You think of the various options and decide what is best for you.

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auntofthebride Posts : 9,354 Registered: 4/2/06
Re: Would you sign a pre-nup?
Posted: Aug 30, 2010 3:56 PM Go to message in response to: PharmToxGirl

dear PTG

"we're going to have to redo everything anyways as we're expecting"

Whoo-Hoo!

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PharmToxGirl Posts : 5,446 Registered: 8/30/07
Re: Would you sign a pre-nup?
Posted: Aug 30, 2010 4:25 PM Go to message in response to: auntofthebride

LOL - Thanks AOTB. We're excited and scared - but I understand that that's normal.

But we'll definitely have to look into redoing everything as time progresses.

I'll have to look into probate here and how complicated it is - I love learning these things preemptively.

 

 

 

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sassy411 Posts : 52 Registered: 8/16/10
Re: Would you sign a pre-nup?
Posted: Aug 30, 2010 5:03 PM Go to message in response to: auntofthebride

Like I said, I do love Legal Zoom. I spent big bucks to have an attorney do my trust. I have to update it & will definitely use Legal Zoom, they are set up for each state in the US and save several hundred bucks.

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jackson132 Posts : 1,623 Registered: 9/13/12
Re: Would you sign a pre-nup?
Posted: Sep 15, 2012 6:20 PM Go to message in response to: CapeTownBride

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