Q: My wife and I have been married for about 10 years. We each have children from our previous marriages. We want to keep our estates separate for our children. Is it possible to create a prenuptial agreement after a couple has been married for this long?
A: When a couple gets married, the state bestows upon them a whole series of rights. Among these benefits are certain inheritance rights. Under Indiana law, a spouse has the right to a certain percentage of a deceased spouse’s estate. What that percentage is depends on things like did the married couple have children together and whether the spouse is a first or subsequent spouse. Generally speaking, first spouses have greater inheritance rights than subsequent spouses unless they have children together.
What this basically means is that even if one spouse disinherits the other, the disinherited spouse can “take against the will” and receive a percentage of the estate.
Although the state bestows certain inheritance rights on spouses, those rights can be waived. The most common way to waive all or some of the inheritance rights is by using an ante-nuptial agreement or, as they are more commonly known, a prenuptial agreement.
As the name suggests, a “pre” “nuptial” agreement is executed before a couple gets married. After a couple gets married, it’s too late to execute a prenuptial agreement. Fortunately a married couple has another option; the postnuptial agreement. Postnuptial agreements are similar to prenuptial agreements only executed after a marriage has taken place.
Courts don’t tend to be big fans of prenuptial agreements and they really dislike postnuptial agreements. In order to avoid potential problems the parties should make sure that they take certain precautions to make it less likely that the pre/post nuptial agreement will be set aside.
For example, each of the parties should be represented by separate attorneys. One of the parties can pay for both attorneys, but each side should be represented independently. Also, both parties should make a full and complete disclosure of their financial position. The parties should understand what it is they are waiving their rights too. Also, the negotiations should be completely free of any appearance or actual coercion.
Postnuptial agreements are an option for married couples, but they certainly aren’t the preferred method of dealing with inheritance rights. If the two of you believe that a postnuptial agreement is right for you, make sure that formalities are followed and both of you engage your own attorney. If you are completely open about the financial circumstances and each side gets independent legal advice, the agreement should address your concerns.