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Clearly, you do not have to enter into a premarital agreement, but it may be prudent.
Back in the day, these agreements carried somewhat of a stigma. People that were not multimillionaires felt as though it would be a slap in the face to ask a fiancé to enter into a prenup. As the years have passed, they have become more widely accepted.
This is something everyone should seriously consider, but it is especially relevant for Californians.
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There are nine community property states, and California is one of them. All property that is acquired during the marriage is considered to be marital property.
Because of this arrangement, there would be an equal division of that property if the marriage ends in divorce. This can potentially be a very unbalanced situation.
If you and your significant other work together to create an agreement that you both feel comfortable signing, your respective interests will be protected.
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This is a good question that applies to many people that are getting married again. The ideal course of action will vary depending on the circumstances, but there is a solution that is widely embraced.
You could establish a qualified terminable interest property (QTIP) trust. Your spouse would be the initial beneficiary of the trust, and your children would be the successor beneficiaries.
When you establish the trust declaration, you would name a trustee to act as the administrator. This can be someone that you know personally, but there is another option that may be preferable.
Trust companies and the trust departments of banks provide trustee services for a fee. A neutral professional will act dispassionately, and investments would be managed by a qualified professional. There would be no longevity concerns, and there would be organizational oversight.
If you predecease your spouse, the trustee would distribute the earnings from income producing assets in the trust to your surviving spouse. During the trust creation phase, you can give the trustee the latitude to make discretionary distributions of the principal if you choose to do so.
Your spouse could also utilize property that is held by the trust. For example, they could continue to reside in a home that is technically owned by the trust.
The initial beneficiary would not have the ability to change the terms of the trust in any way, so your children would be protected. After their death, your children would become the beneficiaries of the qualified terminable interest property trust.
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