Planning an estate can already be quite a task for many people. However, planning for estate administration can be even more daunting for married couples with a prenuptial agreement in Maryland. One man had to deal with this situation but was able to find a solution through a cleverly designed estate plan.
Before the man had married, he had inherited a business from his father, which he was successfully able to grow into a company worth approximately $6 million. After he became engaged to his wife, he became worried about what would happen to the company in the case of a divorce. Therefore, he asked his then-fiancee to sign a prenuptial agreement, which ensured that the man would be able to keep all pre-existing assets, which included his company as well as related real estate property.
As the man became older, he began to become more worried about making sure his family was taken care of in the event of his death. He now had two children whom he was responsible for financially supporting. He was worried because the prenuptial agreement limited the amount of money his wife would be able to receive from his estate. However, the prenuptial agreement only limited how much of his assets could be taken from his estate against his will, but it still allowed him to freely give assets to his wife at his discretion.
The man was able to solve this problem by utilizing family limited partnerships, a limited liability company and a testamentary trust as part of his estate administration plan. However, which estate planning tools one decides to use will be different for each person in Maryland or elsewhere. One’s estate-planning decisions will depend upon how the prenuptial agreement is written as well as one’s own specific estate-planning goals.
Source: The Wall Street Journal, “Creating an Estate Plan Around a Prenup“, Alex Coppola, July 11, 2014