When most people think of prenuptial agreements, they think of planning for the possibility of divorce. However, a prenuptial agreement, or "prenup," can also have an impact on inheritance in the event of a spouse's death. There are a number of reasons you might want a prenup.
Why would someone create a prenup intended to limit a spouse's inheritance? Actually, this is not an uncommon motivation, especially in second marriages or late-in-life marriages. One spouse may have significant assets acquired before the second marriage, as well as children from a first marriage. Should that spouse die, their surviving spouse may inherit most of their assets. Then, when the surviving spouse later dies, those assets will be passed on to his or her children, leaving the children of the first spouse out in the cold.
This seems like an unfair result to most people. After all, the first spouse accumulated those assets before the second spouse was even in the picture. For this reason, many people may choose to execute a prenup to protect their own children in the event that they die before their spouse from a second marriage.
As a general rule, it's possible to limit a spouse's inheritance using a prenuptial agreement, but you will want to be sure that the prenup complies with the law in order to avoid a challenge from your spouse after your death (and costly probate litigation for your estate).
Ohio has not yet adopted the Uniform Premarital and Marital Agreements Act. This Act is intended to streamline the law regarding prenups in the United States. However, Ohio law regarding prenuptial agreements suggests they are enforceable so long as:
In order for a prenup to be considered voluntary, it's generally best for both parties to have the agreement reviewed by their own attorneys well before the wedding. An agreement signed shortly before the wedding could suggest duress, for instance that one spouse threatened to call off the wedding unless the other signed the prenup. Likewise, both parties having an opportunity to get legal review of the document supports a finding that the agreement was voluntarily entered into.
In order to avoid a finding of unfairness, it's probably best not to try to disinherit your spouse completely using a prenuptial agreement. A court is more likely to uphold an agreement in which a spouse agrees to limit their inheritance in exchange for receiving certain property than one in which the spouse signs away their right to inherit without any compensation for that waiver.
In addition to protecting children from a prior marriage, there are other reasons you might want to limit your spouse's inheritance. You might have significant wealth from your family of origin that you want to go back to your family in the event of your death. If you are a partner in a small business, a prenuptial agreement can make sure that your spouse does not become a partner upon your death, something your business partners may not want. (The documents organizing your business should also specify what will happen to a partnership interest in the event of one partner's death.)
If you are not yet married, there are other ways besides a prenup to limit a spouse's inheritance. You could put property in a trust, in which case it would pass outside probate at your death to the named beneficiaries of the trust. Even so, there are advantages to using a prenup. An agreement shows that your spouse was aware of your property interests and agreed to a certain distribution of property upon your death. This would reduce the likelihood of a will contest or challenge to the validity of a trust, conserving the assets of your estate and reducing stress for your intended beneficiaries.