By: Kemp C. Stickney, Chief Fiduciary Officer

Ray Randall and Judy Desano are getting ready to tie the knot. Their union will result in what may be a typically complex family structure of this day and age:

• This will be Ray's third marriage; he comes from a well-to-do family and has much of his wealth tied up in trusts and the family business. He has four children, two from his first marriage and two from his second.
• This will be Judy's second marriage. She has two children, one from her previous marriage, and a stepchild of whom she has custody because her husband died and his previous wife is no longer in the picture.

This new union presents a number of issues that can be addressed with a prenuptial agreement. First of all, Ray's family wants to ensure that their family fortune and business interests will stay within the Randall family for years to come. Second, Ray wants to ensure that all of his children will be financially provided for when he passes on. He must have sufficient income to provide alimony to his ex-wives as well as child support. In short, Ray needs to protect his income and ensure against financial ruin in the event of a divorce from Judy. His track record with marriage makes this all the more crucial.

Judy and her children will be making quite a transition by moving into Ray's home. Ray would also like to send Judy's children to the private school his children attend.

Judy is concerned that her children might be adversely affected should the marriage end in divorce. It's in her best interest to go ahead and negotiate a potential post-marital settlement, even before the wedding.

The Randall-Desano marriage requires a comprehensive review to determine what the premarital agreement should include:

• Ray's family fortune and business interests will remain the property of him and his family in the event of death or divorce.
• The amount of alimony and/or child support Ray currently pays to his two ex-wives will need to be protected should his marriage with Judy end in a divorce.
• At Ray's death, a portion of his assets will go to his family, including his four children, and the rest will be transferred to Judy (assuming they are still married) in the most tax advantageous manner. This may include setting up a Qualified Terminable Interest Property (QTIP) Trust for the benefit of Judy.
• Judy and Ray agree on an amount of money for alimony in a lump sum based upon the number of years of marriage, should he and Judy divorce.

Potentially, Ray and Judy could draw up this prenuptial agreement themselves and have it witnessed by a local notary. However, given the complexity of the situation, it's certainly possible that something could be missed and then the agreement might not stand up in court. Under these circumstances, it is in the best interests of both parties to obtain separate counsel and have the agreement drawn up by professionals with expertise in family law.

Once the prenup has been signed, Ray and Judy can marry and begin their lives together without the worry or concern for the future that they might have encountered had they not planned ahead.

Updated: January 1, 2013

This article is for informational purposes only and is not intended as an offer or solicitation for the sale of any financial product or service or as a determination that any investment strategy is suitable for a specific investor. Investors should seek financial advice regarding the suitability of any investment strategy based on their objectives, financial situations, and particular needs. This article is not designed or intended to provide financial, tax, legal, accounting, or other professional advice since such advice always requires consideration of individual circumstances. If professional advice is needed, the services of a professional advisor should be sought.
© 2013 Wilmington Trust Corporation.