Eskra: A Reminder about Premarital Agreements and Estate Planning

In the recent case of Eskra v. Grace, a person filed a petition attempting to be named as personal representative of her deceased husband’s estate. The trial court denied her petition based on a premarital agreement waiving her interest in her deceased husband’s separate property. The court named the man’s parents as the estate’s co-administrators.

The Court’s Holding

The court held that the man was entitled to introduce evidence in support of her claim that she and her deceased husband mistakenly believed the premarital agreement only applied in case of divorce instead of after the man’s death. On remand, the trial court determined that the error was a unilateral mistake on the wife’s part and that the wife had no entitlement to rescission. The court expressly found that insufficient evidence existed that the husband either encouraged or fostered the wife’s incorrect impression. 

The Appellate Court’s Decision

An appellate court ultimately affirmed the presence of insufficient evidence. Because the wife did not read the agreement and also did not meet with a lawyer to review the document before signing it, the wife carried the risk of error and is not entitled to rescission.

The Role of Prenuptial Agreements in Estate Planning

With divorce rates close to 50% in the United States, more people decide to enter into prenuptial agreements before marriage. These agreements are particularly common with families comprised of children from prior relationships. 

Prenuptial agreements are legal documents that are agreed on by both parties before entering into marriage. A detailed prenuptial agreement should fully address what assets are owned by both you and your spouse. Additionally, prenuptial agreements can address any real estate owned by a couple. After all vital information is disclosed, an agreement will specify how everything should be divided between the two of you in case of a divorce or death. Another issue addressed by prenuptial agreement is whether there is any alimony or support as well as what happens after one or both of the spouses passes away. 

Many individuals falsely believe that prenuptial agreements are only valuable when divorce occurs. In reality, however, prenuptial agreements can be utilized to address the rights as well as the responsibilities of both spouses if one of the spouses suddenly passes away. Another advantage people realize by utilizing prenuptial agreements is that without these agreements, spouses sometimes have the authority to nullify existing estate plans by choosing to take a statutorily defined percentage of the estate.  The ability to both “elect” as well as receive a portion of the estate is required by state law. This requirement is often only waived through the signing of an informed waiver, which is often included in a prenuptial agreement. 

If you’re interested in having your home or other assets pass on to your children instead of your new spouse, an appropriately written prenuptial agreement can also achieve this goal.

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