When You Definitely Need a Trust, Part 2: Protecting Against Gold Diggers

Many people I talk to do not have a pre-nup provision in their estate plan, and this creates a huge vulnerability for their financial legacy. This is especially pertinent for couples who have been married a long time, have kids together, and have no kids from a prior marriage. 

A pre-nup clause is a short segment you put in your trust that says, “look, these assets are here to take care of the surviving spouse and eventually our kids. If the surviving spouse remarries, this money does NOT go to their new partner, nor the new partner’s kids.” 

After all, consider what happens if one spouse passes and the other remarries. Without explicit language to the contrary, the new partner might lay claim to your assets, either during life or at your surviving spouse’s passing. The best way to avoid this fight is at the beginning of the relationship, by having that spouse agree, in writing, that these assets are not theirs, and never will be. 

“But Nicholas,” you might say, “I’ll be dead in the ground. What can I possibly do to make sure they sign a pre-nup?” You can put language into your trust while you are alive, stating that no distributions of income may be made if the surviving partner remarries without a valid pre-nup. You can even place limitations on how much is distributed, for what, and how often. 

This is not legal language or advice, an attorney will do far better than me here. But the gist of it is important to understand. You are saying, “these assets are going to our kids, not the kids of some future spouse who isn’t even in the picture yet.” 

Lastly, your spouse’s new partner will probably benefit indirectly from the income and principal generated by your assets, and maybe that’s fine. In fact, I think you should probably extend to your spouse the same courtesies that you would want to receive in their shoes. This is just a safeguard against major errors in judgment. You want to protect the principal and the income generated by it. You do not want a legal battle between your partner’s second wife and your kids.