Exploring the Legal Links Between Wills, Prenups, Divorces, and Deaths in New Jersey

Marriage, divorce, and death – three important topics. What connects them all? The legal confusion that most people feel around them. Prenuptial agreements, wills, estate plans, divorces, marital settlement agreements, and so many other terms swirl in people’s heads as they try to understand which terms apply to which topic and how one thing might impact another. For example, is a prenuptial agreement still enforced if one spouse dies? Does a spouse inherit their spouse’s estate if there’s no will or if they aren’t named in the will? What happens if a spouse dies mid-divorce? These and many other questions complicate dreams of love and happy ever after, but they don’t have to. With a little help from a skilled family law and estate planning attorney at Bronzino Law Firm, you can begin to untangle the confusing threads that connect marriage, divorce, and death so that you understand how various legal documents may impact you based on your circumstances.

The Interconnection of Prenuptial Agreements and Estate Plans Upon Death or Divorce in NJ

When most people get married, they do so with visions of living up to the well-known vow, “till death do us part.” They also often assume that upon that death, the surviving spouse automatically inherits everything the deceased spouse left behind. However, prenuptial agreements, divorces, and wills can all change what a surviving spouse receives.

Prenuptial agreements, or prenups, and wills are both documents that dictate what happens to a person’s assets. A prenup is intended to dictate what happens to those assets in the event of a divorce, while a will dictates what happens to those assets when the individual dies. However, the terms of a prenup may still be applicable when a spouse dies. The terms of a will may be altered if the will was written based on one set of circumstances but is being probated based on another set.

Divorce intersects with both wills and prenups. Upon divorce, a prenup comes into play as it outlines the terms the couple agreed to prior to marriage, such as specifying that specific assets are separate property despite being acquired during the marriage, limiting alimony, or other terms that may not be ordered without the prenup. But it can also still be enforced when one of the spouses dies. A will comes into play when the testator (the person who wrote the will) dies, but if they haven’t updated the will since getting divorced, or if they are getting divorced when they die, any terms of the will that apply to their former or soon-to-be former spouse may not apply as they would have without the divorce.

Two Types of Estate Distribution After Death in New Jersey

When someone dies, they are said to have died either intestate or testate. If they died testate, this means they had a will at minimum. They may have also had other tools in an estate plan, such as a trust and beneficiary designations. This means that their will and any trusts or beneficiary designations they may have had will be used to distribute their estate.

If they died intestate, this means they did not have a will or any other tools of an estate plan. This means that upon their death, there is no guidance regarding how they wanted their estate to be distributed. This means that the probate court must decide, based on New Jersey law, how the estate will be distributed. New Jersey law stipulates different distributions based on whether the deceased individual was married or single, had children or not, and whether they had surviving parents, siblings, or other relatives through marriage, birth, or adoption.

What a Spouse Inherits Based on Marital Status

If a couple is married when one of the spouses dies, the surviving spouse inherits whatever was left to them in the deceased spouse’s will. If there is no will, then what the spouse inherits depends on the circumstances, as this is determined by the rules of intestate succession. If there are no children and no surviving parents, the spouse inherits the entire estate. If there were children and no surviving parents or no children and surviving parents, the spouse inherits the first 25% but no less than $50,000 and no more than $200,000, while the remaining balance is divided equally between the children or parents.

However, when couples are divorced, in the process of divorce, or living separately, things change. If the couple is fully divorced, the spouse will not inherit anything, even if the will indicates otherwise. If they are in the process of divorce or living separately, the spouse may or may not inherit, depending on the status of their divorce or potential divorce. Additionally, whether the deceased died intestate will also play a role in what, if anything, the spouse may inherit.

How NJ Divorce Changes Your Will and Inheritance Plans

When a New Jersey divorce is final, state law revokes any spousal beneficiary designations in the former spouses’ wills. This means that anything the two spouses left to each other in their wills is not honored if either of them dies before their will has been changed. This also revokes their ability to act as fiduciary, such as being executor of the will or any attorney-in-fact (power of attorney designations) and any rights of survivorship of jointly owned assets.

It is important to note that this applies only to divorces that are final. If one spouse dies while the couple is still in the process of divorcing, the court may determine that the spouse is still entitled to any bequests in the will or that they are to receive their share of the property distribution if such distribution has been agreed upon. This is largely dependent on where in the divorce process they are.

Additionally, if the couple is still married, not in the process of divorce, but living apart in a way that would indicate a divorce was likely, the surviving spouse will not be entitled to an elective share if they are not named in the will. For example, if one spouse had a stroke and is living in a rehabilitation facility when they die, their spouse may still be entitled to an elective share, but if the two spouses are living in separate houses, it is less likely the spouse will receive an elective share.

The Importance of Adapting Your Will to Life’s Changes in New Jersey

Whether an individual is happily married, getting divorced, or has gotten divorced, a valid will is crucial to ensuring that their assets are distributed the way they want. Particularly in cases where the individual has extremely specific wishes about the distribution of their assets (such as giving a specific car to a specific cousin), a will is the only way to ensure that those wishes are honored after the individual’s death. Otherwise, New Jersey’s probate court will distribute the estate based on state law and it is very likely that this distribution will not be what the deceased individual wanted.

Therefore, it is important that whenever an individual is going through a significant life change, whether it is marriage, divorce, or the birth or death of a close loved one, that they review their will and any other estate plan components to ensure everything still reflects their current wishes. It is generally quick and relatively simple to review the appropriate documents and make any necessary updates.

Why Prenuptial Agreements Serve a Purpose and Prevent Problems Down the Road

When many people think of prenups, they may think of movies and romance novels where the extremely rich hero asks the destitute heroine to sign one before marriage, only to change his mind and declare he loves her more than he loves his fortune. However, prenups are much more practical than that, and they can be used even when neither party is particularly wealthy.

Prenups can protect assets that are acquired before and during the marriage. This can be important for a number of reasons. One spouse may have children from a previous marriage for whom they want to ensure certain assets are protected. Both spouses may have their own business and wish to ensure the other spouse has no claim to it if they divorce. One spouse may have a disabled loved one for whom they wish to provide after their death, so they ask the other to sign a prenup that waives their right to an elective share of the estate.

Any assets acquired during the marriage, other than those from inheritance or as a gift to one spouse only, are considered marital property in New Jersey. With a prenup, the couple can agree that specific assets would not be marital property, even if acquired during the marriage. A prenup can also clearly indicate that specific assets were owned by one spouse prior to the marriage so there is no disagreement later over who owns those assets.

New Jersey’s Elective Share Law and Prenups in Estate Planning

New Jersey gives surviving spouses the right to what is called an “elective share.” This share is equal to a minimum of one-third the augmented estate (the estate minus funeral and administrative expenses plus the value of certain lifetime transfers that were made for less than fair value, non-probate transfers to others, and lifetime transfers and non-probate transfers to the spouse). This elective share is reduced by the surviving spouse’s own assets and any probate and non-probate assets the deceased did leave the spouse. The remaining augmented estate then satisfies the outstanding balance of the elective share.

Spouses can make a mutual agreement in which one or both spouses waive their right to this elective share. The easiest and most common way they can do this is with a prenup. By signing a prenup in which they clearly express that they are waiving their right to an elective share of their spouse’s estate, they can give up their inheritance rights and any claims to the estate. This can be beneficial if the spouse waiving their right to an elective share has ample assets of their own, but may be less beneficial if that spouse is financially dependent on their partner.

How Prenups Work After a Spouse Dies in New Jersey

Prenuptial agreements are typically created to protect assets in a divorce, but they can still be applicable upon one of the spouse’s deaths. While there may be others, there are three specific ways that a prenup can apply after a spouse dies. The first is that a prenup can be used to waive a spouse’s right to an elective share. This means that the spouse who is waiving this right is agreeing to be disinherited so that the other spouse can have their assets distributed to other people exactly as they wish. As previously stated, this can be beneficial in some circumstances, but not all, so it is important to discuss this option with an attorney before agreeing to it.

Another way prenups apply after a spouse’s death is that a prenup can legally mandate that one or both spouses must provide life insurance for the other. This would require one or both spouses to purchase a life insurance policy with the other named as beneficiary. The prenup can also require a will to be made.

A third way that a prenup can apply and be beneficial after a spouse’s death is in proving ownership of assets. For example, if the married couple has each been married before and each has children from their previous marriages and those children each claim that their parent owns the home the couple lives in, a prenup can indicate which spouse owns the home.

The Legal Hierarchy of Wills and Prenups Explained

It is important to note that, regardless of the circumstances, a prenuptial agreement does not override the terms of the will. Unless the will specifically does something invalid, such as giving away an asset that does not belong to the deceased, the prenup only acts as additional protection or clarification.

Building a Complete Estate Plan Including a Prenup in NJ

While a prenup is typically considered protection against divorce, it can be a useful part of an estate plan and work hand-in-hand with other tools such as wills and trusts. Couples preparing for marriage can use a prenup to detail clear terms such as which assets they each own and will continue to own separately after the marriage, whether one or both spouses will provide life insurance for the other, and other important stipulations.

Then, the prenup can be used when writing wills and creating trusts to determine who gets those separate assets, serving as proof of ownership if there are questions later. It can also be used to clarify decisions, such as helping other loved ones understand why the surviving spouse may not have inherited certain assets. A will allows the individual to distribute specific assets to specific individuals, though it will need to go through probate.

A trust allows the individual to place assets in the trust and specify who receives them, as well as how and when. A trust can bypass probate and allows the trust creator (grantor) to have more control over asset distribution and use after their death. For example, the terms of the trust can state that a beneficiary can only use their inheritance to pay for higher education or purchase a home. A trust can also be used to protect an inheritance in cases where a beneficiary may be unable to manage it themselves, such as special needs individuals, or those with substance abuse or gambling concerns. Trusts can also protect the assets in them from a beneficiary’s divorce in the future, if properly structured.

Schedule Your Free Estate Planning and Prenuptial Agreement Consultation in Southern New Jersey

Prenups can be a beneficial tool in any estate plan, as well as a useful tool in a divorce. In both cases, they can be used to protect assets and define ownership of those assets. At Bronzino Law Firm, our experienced estate planning and family law attorneys often handle both estate planning and divorce, and we assist couples in creating valid prenups, understanding the terms of their prenups, deciding whether to waive the elective share, and creating a valid will or trust. We proudly serve clients throughout Ocean and Monmouth County, including in Jackson, Berkeley, Manchester, Asbury Park, Howell, Brick, Point Pleasant, Middletown, and Freehold. If you are considering creating a prenup and want to ensure its validity while also protecting everything you’ve worked so hard for, or you need help preparing a legally valid and thorough estate plan that protects your assets for those you love, reach out today for a free consultation and learn more about how a prenup can work together with your estate plan, and how our legal team can assist you with achieving your goals. Contact us at (732) 812-3102