Prenuptial agreements can be very helpful, particularly in high asset divorces. Most people think of a prenuptial agreement as a way for a spouse to protect his or her assets. While this is certainly one reason to use them, prenuptial agreements have a lot of other important and practical uses. Under Massachusetts law, a prenuptial agreement is a written contract between two people prior to getting married. The purpose of this contract is to set ground rules about how to handle property, finances, and other related issues in case the marriage ends, whether by divorce or death. The good thing about prenuptial agreements is that you can adapt them for your particular circumstances. If you or your spouse has a lot of assets, you can use the prenuptial agreement to protect those assets in case the marriage ends. You can also use a prenuptial agreement to specify how property will be divided up or to prevent one spouse from assuming the other spouse’s debts. Or you can define the conditions of alimony, like the amount and duration. Prenuptial agreements do not only have to be about finances. In the agreement, you can set terms related to parenting, such as decision-making and allocation of responsibilities. Perhaps most importantly, prenuptial agreements can help you save a lot of money and stress in the event of a divorce. Getting a divorce can be extremely costly, especially if the divorce is contested. Common costs associated with divorce include court fees, attorney fees, and mediation

After people divorce, most do not intend for any of their assets or property to pass to their former spouses. While people may remember to change their wills, they may wrongly believe doing so will automatically change the person to whom their life insurance and retirement accounts will go to. The beneficiary designations on such accounts and policies supersede any contrary information in a will, however. It is thus vitally important that people review their designated beneficiaries in a divorce. Intended account beneficiaries may not be changed while a divorce is pending. Prior to filing the divorce, people are able to change their beneficiaries. For certain types of retirement accounts, both spouses will have to sign the beneficiary change form, though. If people share a financial adviser, they should be aware that the adviser might inform the other spouse of a change in beneficiaries as well. If changes are not made prior to filing for divorce, people will have to wait until the divorce is final to make the changes. In some divorce cases, a spouse agrees to continue carrying life insurance to benefit the other spouse after the divorce. As courts will sometimes find that the life insurance should instead go to a different person, the former spouse for whom the policy was intended may be out of luck. Following the divorce, they should make certain their spouse reaffirms them as the intended beneficiary to prevent this from occurring. In a high-net-worth divorce, the division of property may be

A recent report suggests that the long-term care required by older Massachusetts residents may be costly. According to one estimate, some individuals may be paying as much as $83,000 each year if they are seeking treatment in a skilled nursing facility. Furthermore, approximately 70 percent of individuals who are older than 65 will require some form of long-term care. The report goes on to state that these figures and Medicaid might be a driving force for an increase in divorce. Suggesting that approximately 66 percent of the aggregate cost of long-term care is covered by Medicaid, the report states that many individuals seek financial help from Medicaid long-term care benefits. These funds may be used to cover home health services or room and board for some individuals over the age of 21. Qualifying requires that the person meet federal guidelines on poverty. Individuals may also spend down their income in an attempt to qualify. Based on a five-year look back period and a recovery process that Medicaid might initiate against a person’s estate after they pass away, the report argues that the rules are promoting divorce. It suggests that if a couple is still married, the assets of the partner who is not receiving benefits are not protected unless they are no longer living together. However, if the couple divorces, they are allowed to live together, and the non-receiving party’s assets are not subject to estate recovery. As this information shows, there may be some financial benefits to seeking a

The amount of a 401(k) account that has accumulated during a marriage is considered to be marital property and thus subject to division in Massachusetts divorce cases. Although early withdrawals prior to the account holder’s reaching the age of 59 1/2 would normally give rise to an early withdrawal penalty, the law provides an exception to this when a withdrawal is made pursuant to a court’s order. When the divorce occurs, the court will issue a qualified domestic relations order defining the portion of the account owed to the other spouse and listing the payee spouse’s identifying information. If the order is not prepared correctly, the account holder may still be subject to the penalty. Upon a correctly completed and submitted QRDO, the plan administrator will then withdraw the amount ordered for payment to the recipient spouse. Although the account holder will not incur an early withdrawal penalty, the payee spouse will incur tax liability for the lump sum payment he or she receives if that is the manner in which they choose to receive what is owed. They may thus wish to explore other options, such as leaving the portion owed to them in the account of their spouse, with the percentage that belongs to them clearly defined in the QRDO. While the recipient will not be able to add funds to the amount or to withdraw prior to when their spouse does, doing so may provide some tax benefits. Another alternative is to roll the finds received over