Watch Out For A Few Prenuptial Pitfalls
Prenuptial pitfalls that people often do not think about include long-term care needs and the importance of handling inheritances properly.
There are many reasons that prenuptial agreements do not stand the test of time in Maryland. Some are more common than others. For example, a bride who was surprised with a prenuptial agreement the morning of the wedding could argue that she was forced into signing it. Similarly, spouses who used the same lawyer for their agreement open themselves up to claims that the lawyer did not advocate for one spouse as zealously as he or she should have.
However, there are other prenuptial pitfalls that are not as obvious. Here is a look at two.
Inheritances handled improperly
Suppose Don and Jane’s prenuptial agreement states that Don is due a sizable inheritance when his father dies, and Jane agrees to let Don keep all of it. Problem solved, right?
Not quite. Now, suppose Don does inherit that nice sum of money. He decides to use part of it to buy himself and Jane a house, and Jane’s name is on the title. If they divorce, Jane could make the claim that she is owed half of the house even though Don’s inheritance fully funded it.
In fact, there are many ways that inheritances can be mishandled. Spouses who want to cover all of their bases should keep inheritances in totally separate accounts and never mix it with property acquired during the marriage, which, in Maryland is called marital property.
Long-term care needs
This one can be especially important for people thinking about getting married later in life. People are living longer and requiring greater amounts of financial support, and some states such as Maryland have their own rules when it comes to, say Medicaid and long-term care, regardless of what prenuptial agreements say.
The good news is that Maryland does try to protect spouses against total impoverishment. For instance, the noninstitutionalized spouse can keep the house and car and a certain amount of resources, perhaps as much as $119,220. However, take the case of Don and Jane again, it is possible that Don would be legally required to use some of his inheritance toward Jane’s long-term care expenses.
There are ways such as insurance and trusts to help protect against the eventuality that assets protected in a prenuptial will have to be spent anyway. And, of course, there is always the option of not getting married after all. For older people who are determined that their children (or other heirs) be taken care of, this can be a really serious consideration.
Prenuptial agreements in Maryland can be complicated. It is possible for spouses to draw up an agreement themselves, but they may forget some important matters. An attorney can help ensure that everything gets covered.