Estate Plans Can Protect Families with a Restrictive Prenup
Virginia Beach, VA (Law Firm Newswire) August 26, 2014 – Sometimes, one of the partners constructing a prenuptial agreement is a business owner. Typically, the document will then be designed to ensure that preexisting assets are completely protected in case of divorce.
This often leads to restrictive prenuptial agreements that keep all preexisting assets separate. Unfortunately, that safe, restrictive prenup can prevent the surviving spouse from receiving assets upon the other spouse's death.
“A prenup is essential for protecting your assets in case of divorce, but it doesn't always account for problems that may occur if you were to die,” said Andrew Hook, a Virginia estate planning attorney with the Hook Law Center. “By forming an estate plan, you can make sure that your family is provided for in the case of untimely death.”
Even with a restrictive prenup, it is possible to leave money and other assets to a surviving spouse without sacrificing the integrity of the prenup.
Family limited partnerships are a strong option for individuals with a successful business who would like to allow their family to receive earnings from that business in the event of their death. A family limited partnership allows the surviving spouse to receive income from the business without gaining control over the business's operations.
To protect both spouses from litigation against the business, general partnerships in family limited partnerships should be held through a limited liability company.
Initially, the business owner holds the majority of limited partner ownership in the family limited partnership. After the individual's death, a portion of the limited partnership interest would be transferred to the surviving spouse, and the shares would be gifted into a testamentary trust, providing income for the spouse and family.
Hook Law Center
295 Bendix Road, Suite 170
Virginia Beach, Virginia 23452-1294
5806 Harbour View Blvd.
Suffolk VA 23435
- Learn the facts about passive index funds
When making investment decisions, people often consider whether they should use an active or passive strategy. Passive investing attempts to duplicate the returns of the market as a whole. This strategy does not involve the selection of securities by a portfolio manager. Without a portfolio manager to track the way an index performs, the cost […]
- What you should know if you inherit your parent’s home
Many people will inherit the house in which their parents lived. Deciding what steps to take with respect to the house can cause you to confront some financial and emotional concerns, and matters can become even more complicated if you have siblings. You have the option to sell the house, move into the house or […]
- How working after retirement affects Social Security
There are people who wish to work when they have reached their 60s, 70s and beyond, but are concerned that their income will adversely affect their Social Security benefits. However, there is no cause for concern because according to the Social Security Administration (SSA), you do not run the risk of losing any Social Security […]
- You can insulate your retirement plan from government policy changes through tax diversification
While government policies can adversely affect your retirement, there are steps you can take to minimize the impact that they can have on your life savings. People are usually concerned about tax rates, which can directly affect your strategy for saving, and the amount of funds in your 401(k)s, IRAs and other accounts that are […]
- Early retirees may need alternative withdrawal strategies
When withdrawing funds from individual retirement accounts, Roth IRAs and other such accounts, retirees may encounter inconveniences, taxes and penalties. However, proper planning may reduce or even eliminate such costs. There are techniques that retirees should use to withdraw funds from their tax-sheltered retirement accounts prior to reaching the age of 59 ½. You can […]