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Prenuptial Agreement and Death of a Spouse

Question: My second husband recently died after four years of marriage. Before we married (each for the second time), he demanded that I sign a premarital agreement. I had previously been married for 23 years and have three children, but had limited assets. He had been married for 30, two children, and a net worth of nearly $3 million at that time. I signed the agreement shortly before the marriage and did not have a lawyer. He paid me $100,000 to sign the agreement which provides that in exchange for my waiving my interest in his estate, he would pay me $500,000 at his death, and if we divorced, I would receive another $100,000. The agreement also says that anything he did for me or put in my name during the marriage would not count toward this. I also waived the right to receive support if we divorced.
During the marriage, he put the house in my name ($200,000), made me the beneficiary of a $250,000 life insurance policy, and put my name jointly on bank and brokerage accounts totaling $300,000. His oldest son is the executor of his will and refuses to pay me the $500,000, saying that when his father put my name on the bank accounts and insurance policy, he intended that to be a substitute for the $500,000. The will has now been filed. I don’t want to make a mess, but I am now 58 years of age and have health problems. Do you think I should just let this pass and not make a claim?
Answer: No. A deal is a deal, especially given the fact that your husband’s lawyer prepared the document and you signed it without the benefit of counsel. Most agreements of this nature contain language to the effect that any modification of the agreement must be in writing and signed by you and your husband.
Unless your husband did not have the mental capacity to voluntarily transfer you the house, make you the beneficiary of the insurance policy, and put your name on the bank accounts or unless you unduly influenced him to enter into these transactions, it would appear to us that the assets in your name are yours in addition to what you should receive under the terms of the agreement.
Your question points up the serious planning errors some individuals make when they utilize joint accounts which pass automatically at death to the other account holder and do not pass through the probate estate.
Given your health condition and the fact that, based on what you tell us, the agreement is clear, we suggest that you contact a lawyer who is qualified to assist you. It appears to us that you should file a claim in the probate court to enforce the agreement or, in the alternative, elect to take against your husband’s will and take a widow’s share which is generally one-third of the probate estate.
SoloFact: Marital agreements are contracts which deal with the rights of a husband and wife regarding each other’s property and/or support if there is a divorce and estate if one party dies. If entered into before marriage, these agreements are called “premarital”; if after marriage, “postnuptial.”. Each state has different rules regarding how these types of agreements are enforced. For that reason, both parties should have lawyers to advise them of their rights and should understand that placing assets in joint names will generally frustrate the intent of the agreement and disrupt an estate plan. To receive optimal benfits from a premarital or postmarital agreement, the parties should sign wills and durable powers of attorney which track the terms of the agreement. Since there are often tax-related issues involved, a certified public accountant or tax lawyer may be required.



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