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Should unmarried couples worry about estate planning?

For many couples, the time period between their engagement and their wedding day seems to fly by, even if those dates are separated by many months. From wedding preparations and invitations to preparing for a new lifestyle, there can be a seemingly infinite number of details to address.

Not surprisingly, thinking about finances and inheritances may not come to the forefront of many couple’s wedding preparations. Although an attorney might commend anyone who takes a proactive approach to their financial planning, many engaged couples might ask themselves whether they need to worry about defining their premarital estate property and the future transfer of assets to heirs.

However, an attorney that focuses on family law would answer that question in the affirmative. In fact, estate planning can be combined with a prenuptial agreement. For example, a prenuptial agreement can contractually keep some assets separate from the marital estate, thus safeguarding inheritances for children from a previous marriage. At the same time, couples may also want to provide for their spouse in the event of death. In addition, a couple will most likely acquire property after their marriage, and that joint ownership might alter their estate planning.

The tools of estate planning can accomplish these diverse goals. For example, a testamentary trust can be set up in a will. This type of trust is established only in the event of the grantor’s death. An irrevocable life insurance trust also preserves assets for heirs by removing the grantor’s life insurance from his or her taxable estate.

At the same time, other revocable trusts may allow a grantor to retain control over assets during his or her lifetime, while establishing procedures that will hopefully avoid probate after the grantor’s passing. With the help of an attorney that focuses on prenuptial agreements and family law, an individual can better plan for the unexpected.

Source: The Wall Street Journal, “Creating an Estate Plan Around a Prenup,” Alex Coppola, July 17, 2014