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Pre-Nups and Trusts

BY Stuart Goldstein
October 01, 2004

Premarital agreements, commonly referred to as “pre-nups,” are usually associated with celebrity marriages. Indeed, you'll likely hear someone ask after a high-profile marriage ends, “I wonder what their pre-nup says?” While most of us would like to learn the juicy details, it's important to remember that a prenuptial agreement does more than list who gets what.

A properly drafted prenuptial agreement states how assets will be divided in the event of a divorce, and how a surviving spouse will receive his or her deceased spouse's assets. In addition, it simplifies support and property division issues, thus reducing costly legal fees (See article infra page 1).

A premarital agreement also can protect the interests of children from a previous marriage. How? The agreement can provide that the wealthier spouse, on his or her death, create a marital trust for the surviving spouse's benefit. The wealthier spouse's estate would claim an estate tax deduction (the marital deduction) for the assets that go into the marital trust.

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