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The government writes your default will
The default will
Without planning for an estate, the tax bill can come out higher than it needed to be, and the estate can go to people the owner never wanted to have it. The details depend on the country, and in some cases more tax is paid than if things had been set up properly. A will also spares other people a mess to clean up.
The default prenup
A prenup works the same way: without one, the law decides how assets divide at a breakup. Many people find prenups unromantic, as if they assume the couple will fail. Some couples have written creative marriage contracts with specific formulas that depend on how many kids they have, and they enjoyed the process without any conflict. Others had nothing in place and ended up with very bad divorce outcomes financially.
A long divorce
One divorce shows the other end. A wife looked after the family while her husband built businesses around the world, and she contributed hugely to his success. Six or seven years after they decided to divorce, he is still in court. Lawyers on both sides are incentivized to squeeze out every penny, and two people with two kids now hate each other.
Who gets an estate when there is no will?
When someone dies without a valid will, the law fills in the plan through intestacy rules. These usually give the estate to a spouse and children first, then to parents and siblings, with the exact shares set by each jurisdiction. If no eligible relatives can be found, the estate generally passes to the state, a rule known as escheat. The term intestate comes from the Latin for without a will.
How did prenups become legally accepted?
For much of the twentieth century, courts in the United States viewed prenuptial agreements with suspicion, partly out of concern that they encouraged divorce. A 1970 Florida Supreme Court decision, Posner v. Posner, helped turn that around by upholding a prenuptial agreement. In 1983, the Uniform Law Commission published the Uniform Premarital Agreement Act, which many states adopted in some form.
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