As a document concerning the ownership of assets should the marriage fail, a prenuptial agreement is often signed by the partner who is not as wealthy as the other before marriage. It is a very simple and effective way to protect one’s hard-earned assets, but it is not foolproof. While not all people married to a high net worth person will sign a prenuptial agreement, this is how it might affect the outcome of a divorce if it exists.
One of the essential purposes of a prenuptial agreement in the event of a high net worth divorce is that it can significantly reduce complications regarding finances.
It can also shield assets while ensuring that both spouses are financially secure and protect children’s access to assets if one of their parents remarry. Prenuptial agreements are governed by the state's law in which the spouses reside.
While all states recognize these documents, your prenuptial agreement must be written specifically for your state of residence. For this reason, you should work with a lawyer specializing in drafting prenuptial agreements, as only they can write one that is valid and the court will recognize that in the event of a divorce. To determine whether your prenuptial agreement is enforceable, you should check whether the following requirements are met:
Firstly, it is of utmost importance to ensure that the prenuptial agreement is entered into voluntarily by both spouses. If the court discovers that one party did not understand the document's meaning, was forced into signing it, or that the agreement is unconscionable, the court will most likely decide the prenuptial agreement is not enforceable.
When it comes to high net worth couples, making sure the partner that is not wealthy understands the implications of a prenuptial agreement is even more important. According to estimates, there are roughly 4.9 million high net worth individuals in the U.S. More than 60,000 people in our country are considered ultra high net worth individuals, with assets of over $50 million. As the number of high net worth individuals keeps increasing, so does the number of prenuptial agreements.
We cannot stress enough the importance of working with a lawyer who understands the specific needs of high net worth individuals when drafting prenuptial agreements. Prenuptial agreements can cover a great range of potential issues and topics.
However, most individuals create these documents because they are concerned about the potential division and distribution of their assets in the event of a divorce. This document protects the rights and obligations of each spouse regarding their property. For instance, if one partner owns a house before marriage, the document could say that this spouse will cover the costs to maintain the property.
If one partner owns a vacation home, the prenuptial agreement could state that only they would have the right to lease or sell the property. Furthermore, prenuptial agreements can cover the following matters:
While it is without a doubt unromantic to discuss and negotiate a prenuptial agreement between the time of your engagement and the wedding, it can save a lot of stress and money if you are one day faced with a high net worth divorce. These documents can address property division, spousal support, and virtually every financial issue that can arise during a divorce, as we have previously discussed.
Sean M. Cleary, the owner and founder of our law firm, can provide you with high-quality assistance whether you intend to draft your prenuptial agreement or get a high net worth divorce. He specializes in handling every aspect of divorces involving a spouse whose income is well above the average to help them protect their assets and manage to finalize the divorce without making tremendous compromises that could greatly affect their finances.
If you are a high net worth individual, do not hesitate to give us a call, and we will offer you superior legal assistance. With over two decades of professional experience, Sean M. Cleary is able to help you manage your high net worth divorce in a way that will make you content. Ultimately, the attorney will ease the burden of your divorce, as he is well aware of how challenging going through a high net worth divorce is without proper guidance.