You're engaged? Congratulations! Now, add this item to the wedding planning list: prenuptial estate planning.
Estate planning for the recently engaged couple is a challenge. It's something that is often overlooked, even by financial advisors. Yet it matters, as I've seen in my own practice.
Ken, someone I had known since childhood, came to me as a client when he was in his 40s and recently engaged. The wedding date was a year away. Ken’s family was quite successful, and he personally owned a large income-producing commercial property that did quite well.
As we discussed his estate planning desires, I learned that he had no will but intended to have one drawn after the wedding. His fiancé worked with him in managing the commercial property, which he wanted her to inherit. It was important to him that she would be provided for.
I reminded him that wills were for today, not tomorrow, and it was important that he get a will drawn now, before they were married. Dying without a will in South Dakota meant his family would inherit the property and his fiancé would receive nothing. He was clear that this was not what he would want to happen, and he said he would get an appointment with an attorney.
A few months later I got word that Ken was in the hospital in grave condition with advanced stage cancer. Before I could help him do anything about his estate planning, Ken died. He had never made a will. His family inherited his commercial property, and his fiancé didn't get a nickel from his estate. Ken really wanted her to be provided for and inherit the property. It was not accomplished.
I often have wondered if Ken was agreeing to have a will drawn more to placate me, while inwardly resisting the "unnecessary" expense of drawing a will twice, once before marriage and once after.
It certainly will cost more money to plan for the distribution of an estate both before and after a marriage. For younger couples with few assets, this is likely to be an unnecessary expense. It is a worthwhile and wise precaution, however, for those who marry later in life, who have been married previously, or who have been financially successful. It's especially important for couples who may have invested time or money in one another's property or businesses that are not jointly owned.
I encourage engaged couples to have meaningful conversations about their finances. The estate planning aspects of those conversations are likely to focus on what needs to be done after the wedding. Rarely do people consider that they may need to take some estate planning steps before marriage.
True, engagements sometimes fall apart. In that event, a prenuptial will would need to be changed. It's still a good idea to consider making one. The bottom line is that if you would want your fiancé to have any property or portion of your estate, regardless of whether you are married, it's wise to formalize that intent with the necessary documents to carry out your wishes.
This article originally appeared on Watertown Public Opinion.
