by Anita Schnee, Attorney at Law
George and Ginny had a great marriage and an extended family to whom they wanted to leave everything when they passed. Unfortunately Ginny was then diagnosed with cancer. She began to worry: What could happen if she died before George did, and George remarried? Or vice versa? What if the second spouse started pushing to get what Ginny and George had intended should be their children’s inheritance? Neither Ginny nor George – nor their children, needless to say – much liked this picture.
Ginny and George should call us. We can help them create trusts designed to leave their property to their children and descendants. The trust could also require that if either spouse were to re-marry, the second spouse must sign a prenuptial agreement. There, either spouse would promise to keep Ginny’s and George’s property separate.
The prenuptial agreement would have to be carefully drafted, to make sure it was fair to both re-married partners. But the advantages would be important. First, the prenup could protect Ginny’s and George’s children from losing their inheritance to a new partner or step-siblings. Second, the prenup would require each second-marriage spouse to create comprehensive powers of attorney, to avoid guardianship proceedings if either spouse became incapacitated. Third, the prenup would require both spouses to make sure that any new estate plans would not disturb the provisions of Ginny’s and George’s existing trusts.
A prenup should also consider the possibility that second spouses might someday become ill or incapacitated, and might need Medicaid assistance to pay for nursing home or long-term care. The government can disregard prenups and, regardless what the prenup says, can count some income and assets against both spouses. The well spouse might have to pay for some nursing-home costs incurred by the ill second spouse. Ginny’s and George’s estate might also have to be spent on the second spouse’s medical expenses. These are heavy costs that could drain most or all of Ginny’s and George’s childrens’ inheritance. We know how to protect that inheritance to a significant extent.
Do-it-yourself prenups are not the way to go. These contain none of the provisions needed to plan for Medicaid. They also might not work if the couple moves to a community-property state like Texas or Nevada, where creditors have considerable power to access the property of one spouse to pay the other’s debt.
Are you thinking of a second marriage? Be sure to consult us.
A prenup is not just for Hollywood divorces.
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Anita Schnee is an attorney licensed in Arkansas with the law firms of the Elder Law Practice of Cash and Whatley, and Mitch Cash Ltd. Rights to this article are shared only with users who are part of the Eldercounsel or Blue Star Honor Care organizations. For an attorney in your state, please click here.
Source: Cash and Whatley
