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Prenuptial Agreements: What You Need to Know

By Charles Gross | Published May 13, 2013

Anyone with substantial assets or income considering a second (or sometimes first or third) marriage should give careful thought to entering a prenuptial agreement.

A prenuptial agreement can help preserve assets and/or income for children from a previous marriage or simply allow someone to preserve their accumulated assets.

The agreement in its simplest form provides a description of the assets of each party, and in the event the parties get divorced or die, the new spouse waives any claim to the assets the other party owns at the time of the marriage.

In most cases the agreement is sustained by courts when challenged.  In order to ensure the agreement withstands a legal challenge, several pitfalls should be avoided.

  • Make it fair; a one-sided agreement may not withstand a court’s scrutiny.
  • Do not sign it at the last minute.  Signing a month or more before the wedding is recommended.
  • Put everything in writing; do not rely on oral side agreements.
  • Do not omit assets.  A material omission of assets can lead to a claim of fraud with the agreement disregarded.
  • It seems obvious, but both parties should have their own attorneys.

We Can Help

At the Law Office of Charles H. Gross, we are committed to providing expert legal counsel to our clients in Lenawee County.  Prenuptial agreements can be confusing.  Ensure that your prenuptial agreement is handled correctly.  Contact Chuck at 517-423-8344 or contact Chuck online.

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Estate Planning: Leaving Your Assets to an SSI Recipient

By Charles Gross | Published May 6, 2013

When discussing estate planning and beneficiaries, a number of circumstances may arise. An all too common scenario is beneficiaries (most often children) who have disabilities. These disabilities can be from birth, injuries, or just evolve from health issues. If they are unable to work, and receive Social Security Income (SSI), they are extremely limited in the assets and income they receive and still remain eligible.

Leaving an SSI recipient your assets can often disqualify them from their SSI benefits. This results in a significant hardship and they must then exhaust the inheritance before they are again eligible for the SSI benefits. Leaving assets directly to beneficiaries, through payable on death designations, or naming them as beneficiaries of life insurance policies, is an excellent way to avoid probate. Unfortunately, this can lead to SSI beneficiaries losing their benefits.

An alternative is to have your assets pass through your will or trust. It is important the document contain a provision, which allows the trustee or executor the ability to withhold payment of income and/or the transfer of assets to a beneficiary who is receiving certain benefits. This allows the beneficiary to continue to receive SSI and have the inherited assets supplement their needs.

If your documents were drafted by our law office in the last few years, we have included a provision allowing the trustee or executor the ability to distribute the assets as needed to best assist your child (or other beneficiary). The provision only allows distribution as deemed necessary and therefore the beneficiary has no absolute right to the asset preserving their ability to receive SSI.

One thing to keep in mind is that circumstances change. Often when we draft documents, or make beneficiary designations, everyone is healthy. If that changes after the ink dries, it can be an enormous problem for the beneficiary, which can be avoided with proper drafting.

If you have questions or concerns please call us or make an appointment to review your estate plan.

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How Will Bankruptcy Affect My Credit Score?

By Charles Gross | Published April 29, 2013

Bankruptcy in Michigan

Many clients contemplating filing bankruptcy are concerned about the impact of filing on their credit score.  Often they believe a filing will affect their score for 8 years.  In fact, currently a bankruptcy will be part of your financial record indefinitely.  However, often the best way to improve a score in the long term is to file.

Most people who contemplate filing should have done so several years before they do so.  Most have been miserable with anxiety (Not Sleeping at Night, NoFollow) over how to pay their bills, but attempt to hang on out of pride, a sense of obligation, and other admirable excuses.

In reality most have obligations that can never be met and continue to dig themselves into a financial hole.  Once your unsecured debt exceeds an amount that you can realistically pay back in two to three years, it is time to consider a bankruptcy filing.  Without such a filing, your credit score will continue to decline.

A bankruptcy filing will typically eliminate your unsecured debt and allow the process of improving your credit score to begin.  Since you cannot file again for 8 years, creditors will now see you as someone with no unsecured debt and no way to file.  As a result, you become a viable candidate for a loan.

 

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Downtown Abbey Playbook: Estate Planning

By Charles Gross | Published April 8, 2013

The popular PBS show, Downtown Abbey, provides multiple examples of estate planning opportunities.  Although the Earl of Grantham is arguably better off than most of us, his financial planning leaves much to be desired.

Anyone with substantial assets should consider a dynasty trust to protect their assets from bad management, creditors, spendthrift family members and divorce settlements.  The definition of substantial assets can depend based on how many beneficiaries will receive a share, and how well equipped they are to manage the asset and finally, how much money is available.

A dynasty trust is essentially a trust where the assets are disbursed over a period of time, in most cases over years, in others over generations.  Such trusts typically involve a professional trustee, such as a bank trust department or law office, but could also be managed by a capable family member.

The world we live in is increasingly competitive and uncertain.  The days of a 30 year career and comfortable pension are becoming a memory.  In order to allow future generations a less stressful financial life, a bit of planning can help smooth life’s bumps.  Planning can also help insure that assets earned in a lifetime are not dissipated in a few short months.

In planning for the future, we each need to ask not only, “to whom do I leave my assets?” but also “how do I let them have it?”

Estate Planning in Lenawee County 

If you have questions regarding your estate, please call Chuck at 517-423-8344 or contact our office online.

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