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We usually only think of a Contracting Out Relationship Property Agreement (PreNup) as a way of protecting our assets should our relationship end in separation but that’s not the only benefit. A Prenup can also provide protection when our relationship ends when one or both partners has passed away.

 

The issue of asset protection upon death most frequently comes up with individuals entering a new relationship later in life, particularly where one or both parties have children from a prior relationship. They often want to ensure that their children will remain the ultimate beneficiaries of their estate.

 

Here is an illustrative scenario: Harry and Hillary are in their early 50s, each with adult children from prior relationships. Each of them is coming into the relationship with some assets, though Hillary’s assets exceed Harry’s assets by approximately $1 million.

 

Harry and Hillary enter into a Prenup which defines each party’s existing assets as their separate property. Hillary dies five years later, leaving behind a Will that she had executed prior to her relationship with Harry leaving all of her assets to her children. Harry makes a claim for half of Hillary’s assets. Can Hillary’s estate rely upon the Prenup to ensure Hillary’s assets go to her children?

 

Short answer, yes. Provided the Prenup satisfies the obligations of the Property (Relationships) Act, all assets set out in the Prenup as being Hillary’s separate property will go to her children as per her Will. 

 

Feel free to contact me, Hayley Boud on 021 077 7785 for a free 15 minute phone call. 

 

For your free self assessment tool to find out if a Prenup is right for you, please below.