We've previously discussed the concepts of Marital Separate Property and Marital Partnership Property. In this post, we'll review the basics of a prenuptial or premarital agreement and how it affects estate planning. For the purposes of this post, "prenupital" and "premarital" are used interchangeably.
In Hawaii, premarital agreements are governed by the Hawaii Uniform Premarital Agreement Act, which was enacted in 1987 and codified under Hawaii Revised Statutes Chapter 572D. The following are some important points to keep in mind for prenuptial agreements:
Effect upon property. A prenuptial agreement can define the rights and obligations of the parties with respect to property whenever and wherever located and acquired. This usually means that the parties will designate their individual property as separate property and any joint property as martial property so that "Marital Separate Property" and "Marital Partnership Property" is clearly defined. As discussed in an earlier post, this can drastically alter property distribution in the event of a divorce, depending on the parties' financial positions prior to and after the divorce.
Effect upon spousal support. A premarital agreement can modify or eliminate payment of spousal support and alimony upon divorce.
Effect upon death. In Hawaii, a surviving spouse has a statutory right to claim an "elective share" of her deceased spouse's estate, which is basically a right to a percentage of the deceased spouse's estate. The "elective share" is meant to prevent a spouse from disowning the other spouse and leaving her destitute if there is an imbalance of wealth between them. A premarital agreement can eliminate a spouse's right to an "elective share". This means that the surviving spouse has no right to the deceased spouse's estate, except for what is provided in the deceased spouse's will or trust or transferred via intestate succession. Spouses will often provide for each other in their testamentary instruments, but a premarital agreement gives them the latitude to dispose of their assets without being constrained by the statutory obligations imposed by the Hawaii probate code.
6/19/2013 02:35:28 pm
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Samuel K.L. Suen is an attorney based in Honolulu, Hawaii specializing in estate planning, probate, conservatorship and guardianship matters.
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