Congratulations to Sarah Privette, President-Elect for the Wake County Bar Association for 2023!
When you have worked hard your entire life to build up wealth, you may want to see it go to your children after you have passed. That’s not unusual, and it’s not hard to do if you and the children’s other parent are still married to each other. But what happens if there’s a second marriage? How do you protect the assets you intended to pass to the children of your first marriage?
Say you’re a divorced person with two children from your first marriage. You have acquired some wealth and some assets at this point. Then suppose you decide to remarry. How do you protect or set aside the assets you want to pass to your children?
One way is to enter into a prenuptial agreement with your new soon-to-be spouse. A prenuptial agreement is a document you both sign that expressly sets out how certain of your assets will be handled in the event that the marriage ends. In this scenario, you can specify which of your pre-marital assets you want to pass to your children should your new marriage end in divorce.
A prenup can be used to protect a variety of assets so that they may be passed on to your children. You can include instructions about the following:
These are not the only items you can include in a prenup. Talk to your attorney to determine what other assets you have that may need to be protected.
If you’re also concerned that the assets you leave your children may be lost to them in a divorce of their own, here are some considerations. Make your children aware of the assets you intend to leave them, and ensure that they have separate financial accounts in their own name set up to receive either their inheritance or income after your death. As long as they do not commingle the funds or assets they receive from you with their spouse’s, those assets should remain separate property.
This can help ensure that any money your child receives from their inheritance is protected from being subject to division in divorce. However, if your child places income they receive from your estate into a financial account they jointly own with their spouse, that account may be given over in part or in whole to your child’s spouse in the event of divorce.
Depending on your and your children’s age, thinking about your children losing their inheritance in divorce may be the furthest thing from your mind. For example, if your children are still minors, they obviously have years before they might even consider getting married. If you have a child approaching marriage or who was recently married, you might think that taking steps to protect your child’s inheritance from divorce seems completely unnecessary since your child and their partner seem committed to one another.
However, even a marriage that starts off happy may end in divorce. Talk with your child about creating a prenup of their own to protect any assets they receive from you or anyone else during the course of their marriage. Using the example of the prenup you created before your remarriage, you can demonstrate the benefits of having such a plan in place in the event the unthinkable happens and their new relationship fails.
As long as the prenuptial agreement was made in accordance with Texas laws and doesn’t violate anyone’s rights, your prenup will be honored in your divorce. Your prenup can’t include provisions that waive child support for the children of the marriage, and you probably can’t sign away a spouse’s rights to the other party’s pension.
In order to make sure that your prenup does what you intend for it to do and that it is legally enforceable, you should talk with an experienced divorce attorney for guidance.
If you are concerned that the inheritance you plan to leave your children may not reach them after your divorce, or that they may lose what you leave to them in a divorce of their own, don’t worry. Call the Raleigh divorce attorneys of Marshall & Taylor PLLC at (919) 833-1040 or fill out our contact form for a confidential consultation to discuss your options and to learn more about how we may be able to help.