As more Americans are choosing to get married later in life, prenuptial agreements are becoming more common. The biggest reason for this is that spouses are bringing more property into marriages than ever before, including real estate, retirement plans and businesses.
Oftentimes, an individual who wants to protect certain assets with a prenup also wants to provide for his or her spouse and/or children in the event of death. When that is the case, a prenup is often accompanied by estate planning tools to meet all of the goals the individual is trying to achieve.
An example of this was recently discussed in the Wall Street Journal. It involved a man who inherited a family business during his 30s and built it into a multi-million dollar company. When the man married in his 40s, he wanted to make sure that the business would stay in his control if the marriage went south.
However, he also wanted to make sure that his wife and their children were provided for upon his death. Because the business made up the vast majority of the man’s wealth, it took some careful estate planning to achieve the man’s goals.
A financial planner advised the man to use family limited partnerships to provide his wife with income from the business but not control over its operations. Ultimately, the man was happy with the still having the protections of the prenup and his wife felt confident in her financial security.
As the financial planner explained, having a prenup doesn’t mean a person can’t still leave money to their spouse. “The prenup protected the client’s assets from being taken against his will, but he was still free to give them at his discretion,” he explained.
Because estate planning issues often overlap with other areas of law such as family law and real estate law, it can be very advantageous to work with a law firm that advises clients in all of the areas involved.
Source: The Wall Street Journal, “Creating an Estate Plan Around a Prenup,” Alex Coppola, July 11, 2014
