Resolving a high net worth divorce can be complex, and contentious disagreements may occur when dividing substantial wealth and assets. One way to mitigate conflict and avoid protractive litigation is to have a prenuptial agreement in place. A prenuptial agreement, also referred to as a prenup, is a legal contract entered into by couples before marriage that determines how their financial affairs will be handled in the event of divorce or death. A family law attorney with experience assisting people who have a high net worth can help ensure that a prenup will be applied and enforced correctly during the divorce process.
The Purpose of a Prenuptial Agreement
Prenuptial agreements serve several purposes when it comes to high asset divorces:
- Protecting separate property: When one or both spouses enter the marriage with considerable assets, they may want to ensure that these assets will remain separate property in case of divorce. A prenup can specify which assets will or not be subject to division.
- Decisions about asset division: In high asset divorces, there are often complex investments, businesses, real estate properties, and other valuable assets that will need to be addressed. A prenup can outline how different types of assets will be divided between the spouses.
- Addressing spousal support: Prenups can include provisions regarding whether spousal support (also known as alimony) will be paid by one spouse to the other. This can help ensure that neither spouse will face excessive financial burdens after the marriage ends.
- Safeguarding business interests: For people who own businesses or professional practices prior to getting married, a prenup can protect those business interests from being subject to division during divorce proceedings.
The Impact on Property Division
A well-drafted prenuptial agreement can have a significant impact on how property is divided in a high net worth divorce. Without a prenup, assets acquired during the marriage are subject to equitable distribution, which means they will be divided fairly. Illinois law does not require marital property to be divided equally, and determining how much each spouse should receive can lead to costly litigation during the divorce process.
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