Prenuptial Waiver, Elective Share, and a Revocable Trust
In 2010, Husband and Wife signed a prenuptial agreement. Wife waived 'all rights to an elective share and to any property, trust, or inheritance from Husband' in exchange for $250,000, which Husband paid. Husband died in 2024. His will leaves Wife $100,000 and the residue to his children. His probate estate is $1,800,000. He also had a revocable trust holding $1,200,000 that pays Wife $40,000 per year for life, remainder to his children. Husband had $400,000 of life insurance payable to Wife. The jurisdiction's elective share is one-third of the augmented estate. A statute makes prenuptial waivers enforceable if there was fair and reasonable disclosure of the other spouse's finances. Husband gave Wife a one-page list of assets in 2010 showing $600,000 in savings and a $300,000 house, but omitted a $500,000 brokerage account and his future inheritance. Wife now elects against the will and claims the trust income and life insurance in addition.
1. Is the prenuptial waiver enforceable? Explain the disclosure and voluntariness factors.
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Enforceability of the prenuptial waiver
A prenuptial waiver of elective-share rights is enforceable only if it was knowing and voluntary and if there was fair and reasonable disclosure of the other spouse's finances. Husband gave a one-page list showing $600,000 in savings and a $300,000 house but omitted a $500,000 brokerage account and a future inheritance. Those omissions are material; they understate Husband's wealth by at least $500,000 and possibly much more. If Wife had independent counsel and knew the omitted assets, the waiver might still be enforceable. On these facts, a court is likely to find the disclosure inadequate and the waiver unenforceable, especially because it purports to waive all rights to property, trust, and inheritance.
2. If the waiver fails and the augmented estate is $3,000,000, how should Wife's elective share be calculated and what may she retain?
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Elective share
Assuming the waiver fails and the augmented estate is $1,800,000 + $1,200,000 = $3,000,000, the elective share is one-third, or $1,000,000. Wife has already received $100,000 under the will. The $250,000 prenuptial payment is trickier: it was consideration for a waiver that failed, so a court may treat it as an offset against the elective share to avoid double recovery, or may leave it in place if it was a separate contract payment. The $400,000 life insurance is payable to Wife outside probate; if the augmented estate excludes it, she keeps it, but it may be credited depending on the statute. The trust income is not a lump-sum payment; Wife's elective share is a claim against the estate and included trust assets, not a forfeiture of trust income unless the trust is used to satisfy the share. She should not receive a double share.
3. Can the children use the trust's spendthrift clause to block Wife's elective share claim against the trust?
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Spendthrift clause
A spendthrift clause limits voluntary and involuntary transfers of a beneficiary's interest by creditors. It does not prevent a surviving spouse from asserting an elective share against assets included in the augmented estate. The elective share is a statutory right, not a creditor claim, and revocable-trust assets are typically included because the decedent retained control. The children cannot use the spendthrift clause to shield the $1,200,000 trust from Wife's election. If the trust is used to satisfy the elective share, the trustee must account for the $40,000 annual payments Wife has received.