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A shared goal within estate planning and prenuptial agreements

When a Philadelphia resident has amassed a considerable amount of wealth, handing those assets down to children and grandchildren is a source of pride. No one wants to envision a scenario in which an heir loses access to a chunk of his or her inheritance, but that is a risk that must be mitigated with proper planning. Fortunately, there is an estate planning approach that can help make sure that wealth passes down to the intended recipient.

One of the biggest financial risks that anyone takes is getting married. Statistics show that many marriages will eventually end in divorce. When that outcome occurs, marital wealth is divided between the parties. For those who have received an inheritance, it is possible to lose a significant portion of that wealth during the property division process.

One way to safeguard against such an outcome is to hand down wealth via a trust. Because the assets placed within the trust are the property of the trust itself, they are protected from divorce, liens or other financial matters that can impact one's heir. However, simply creating a trust may not be sufficient.

Another layer of protection can be obtained by encouraging one's intended heir to draft a prenuptial agreement prior to tying the knot. Language can be included within a Philadelphia prenup to specifically address an expected inheritance. When the marital contract specifies that an inheritance is not to be included within property division, the wealth held within the trust is even more secure than just taking an estate planning approach.

Source: wealthmanagement.com, "Defeating the Three Big, Bad Wolves of Estate Planning", Robert T. Napier, May 12, 2016

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Larmore Scarlett LLP

Larmore Scarlett, LLP
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