May Tip of the Month
You Want Me To Sign What?
Many people who are divorced or widowed decide to remarry because they are lonely and have met someone whose companionship they desire. In these situations the parties may have substantial assets, and there are often children from a prior marriage. Therefore, it is very important to carefully review the financial arrangements in advance and formalize them in a prenuptial agreement. Just a few common issues include:
Dealing with these and other issues may lead to considerable tension among the new marriage partners and among children of the spouses from former marriages. However, a prenuptial agreement will usually keep the discord to a minimum compared to a situation where major issues have not been dealt with, or where the disposition occurs when one of the parties is no longer fully capable and the other marriage partner seeks inequitable financial arrangements. Of course, the services of us, as your trusted CPA, can go a long way in fashioning a fair prenuptial arrangement and in defusing some of the tension that is bound to arise.
Similarly, protection from a spouse’s creditors, the need to provide for children from a prior marriage, a change in your financial circumstances such as the sale of a business, or the need to modify a prenuptial agreement may require a person to execute a postnuptial agreement. Such an agreement is similar to a prenuptial agreement and is used to determine how assets should be divided upon death or divorce. To avoid rancor and come to an equitable arrangement, the need for such an agreement should be discussed between the spouses and both parties should be represented by an attorney and CPA. This will insure that the arrangement is in the best interest of both spouses as well as their children. Since a postnuptial agreement is a marriage contract, and these contracts are governed by state law, the agreement should also specify the controlling state. Our services are frequently sought in connection with rendering financial and tax advice for parties to these postnuptial arrangements but you should also let us know if you need a name (or two) of a lawyer seasoned in this arena.