Does a Prenup Cover Future Inheritance?

Yes, you can use a prenuptial agreement to protect your future assets, such as an inheritance you plan to receive. Adding a proper clause to the prenup can help you avoid legal complications and keep full control of your assets.

In most cases, a couple creates a prenuptial agreement to protect the property and assets that they own prior to marriage. However, the financial situation of one or both spouses can change in the future. If you or your partner expect to receive an inheritance at some point, you may want to add a clause to your prenup that protects this marital asset. 

Can a Prenuptial Agreement Protect Your Inheritance?

The first thing you need to define is how your inheritance will be viewed: as marital or separate property. This depends on when you receive the inheritance and how you treat it after you receive it. 

If your inheritance is considered separate property, then it will be yours to keep and won’t have to be divided in case of a divorce. But if it is considered marital property, it will be up for division after a divorce like other property that you have acquired during the marriage. 

So, does it matter if you receive your inheritance before or after the marriage?

It depends. 

Generally, if you receive an inheritance before you get married, it will be considered separate property. This is the case for most things you own before marriage. 

If you receive the inheritance while you are married, it may still be considered separate property. If your spouse is not mentioned in the will from which you are receiving the inheritance, then you could make the case that the property you have received is intended for you only. However, if you commingle your inheritance assets, they may be up for division in case of a divorce.

So, “what is commingling?”, you might ask.

There is one important thing you should know. No matter how you received your inheritance, how you treat it is what will define what happens to it in case of a divorce. Under certain circumstances, your inherited property can “transition” from separate property to marital property. This will happen if you commingle your assets. 

Commingling typically happens when an heir deposits their inheritance into a joint account so that they can use this money to pay for common marital expenses. For instance, if you use your inheritance for anything from purchasing groceries to repaying your mortgage, it may be seen as joint property. If this happens, you will need to prove that you never had the intention of sharing these assets — which can be difficult. 

For this reason, adding a proper clause to your prenuptial agreement can be a more certain way to protect a future inheritance. 

What Else Does a Prenup Protect?

A prenuptial agreement is a document that defines your and your spouse’s financial and property rights in case of a divorce. 

Among other things, it categorizes your property into premarital property and marital (or community) property. This affects a variety of assets: bank accounts, real estate, retirement funds, insurance, rights to business ownership, debt liability, and more. 

You can add provisions to your prenuptial agreement that stipulate any inheritance one of the spouses receives during the marriage is considered separate property and is not up for division after divorce. 

When drafting your prenuptial agreement, make sure it fulfills these necessary conditions:

• The agreement needs to be in writing
• Both parties need to disclose honestly their finances
• The agreement needs to be created prior to marriage
• It needs to be signed by both parties
• The agreement needs to be conscionable and reasonable

Most states require that both parties have separate legal representation when signing a prenup. This makes sure that neither party is at a disadvantage and that both parties are aware of the consequences that come with signing the agreement. 

Note that you can also create a postnuptial agreement. As the name suggests, a postnuptial agreement is an agreement you sign after marriage. Just as with a prenup, it can define what happens to your inheritance and other assets in case of a divorce. A postnuptial agreement is often used as an addition to a prenuptial agreement. It is a useful option when the financial circumstances of one or both spouses have changed since marriage and there are new assets to consider.

Do I Need a Lawyer To Make a Prenuptial Agreement?

In most cases, the answer is yes. Both parties signing a prenup will need a lawyer to make sure their interests are protected, and they are not taken advantage of. A lawyer will help you prepare the financial documentation needed to evaluate your situation, draft a prenuptial agreement, negotiate on your behalf (if needed) — and more. They will also ensure that the agreement doesn’t break any laws and stands up to legal challenges.

Because drafting a prenuptial agreement includes a number of actions, most lawyers will charge you a set fee for a full package of prenup services. Thus, the full price for creating a prenup usually ranges from $1,500 to $5,000.

However, we understand that this may not be the best option for all. If you or your spouse already understand the basics of a prenuptial agreement, you may only need limited services. An pay-as-you-go “unbundled” attorney can charge you for only the tasks you specify.

We can connect you today with a local attorney in our network who specializes in drafting prenuptial agreements for an evaluation of your case and potential legal costs.