In the case of Mid-American Pension v. Michael Cox, a husband and wife came to an agreement and signed a post-nuptial agreement promising to disclaim any right to the other’s assets in the event of divorce. Mr. Cox filed for divorce (this was the third time, and they had been married to and divorced from each other twice before), but never succeeded because he passed away before the proceedings could be concluded. All the same, Mrs. Cox was supposed to disclaim everything, including his IRA, but that did not happen. The parents of Mr. Cox were the intended and designated beneficiaries of their son’s IRA.
When the not-yet-ex-wife and her in-laws went to court, Mrs. Cox prevailed because the proper protocol for disclaiming an interest in retirement funds was not followed. You see, IRAs, pensions, and the like have very specific and legally enforced requirements, and the post-nuptial agreement did not cut the mustard. In fact, a simple form from the plan provider would be necessary in this instance.
IRAs and pensions are one thing, but they are not the only assets to consider when entering into a pre-nuptial or post-nuptial agreement. Follow the “carpenter’s rule” and measure twice and cut once. There are few do-overs if the time ever comes when the agreement must be enforced.
