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October

Importance of a Prenup for High Net Worth Divorce

By Iafrate & Salassa

Wedding band on pen with money in background when needing Family Law Firm Sterling Heights.

Prenuptial agreements are appropriate for any couple about to get married, but they are of particular importance for couples with a high net worth. Divorces that involve high net worths or a great amount of assets are incredibly complex. First separate property and marital property must be defined, and then it must be divided. All of this is extremely complex, but becomes much more straightforward when a prenuptial agreement outlines the terms.

How to Properly Draft a Prenuptial Agreement

In Michigan, prenuptial agreements are enforced as long as they are fair, equitable, and reasonable. To be enforced, both parties must have also entered into the agreement willingly. 

To ensure the document is enforced by the courts, both sides should have legal representation that can confirm the validity of the agreement in the event there is ever a dispute in court. This is sometimes a point of contention in high net worth divorces. The higher-earning spouse sometimes has a lawyer draft the agreement, and the other party is unrepresented when they sign, which can pose an issue if there is a dispute in the future.

It is always important that all parties enter into a prenup voluntarily, but this too, becomes more important in high net worth cases. If a judge determines that one party did not fully understand the agreement, or the financial implications of it, they may deem the agreement unenforceable. The issues in your divorce then will be decided based on the laws of the state.

Just as important as a prenup is, it is just as crucial that it is properly worded. Sometimes in high net worth divorces, much of the wealth was accumulated after the couple was married, which a prenup should account for. Additionally, one or both spouses may own a business, or several, or may have children from a previous marriage they have to consider. All of this makes prenups for high net worth couples more complex, but also much more necessary.

What to Include in a Prenuptial Agreement

While you can and should customize your prenuptial agreement to your own situation, there are certain things you can and cannot include in it. Prenups are generally used to determine issues of property division, alimony, and other financial issues. You can outline which party will be responsible for the cost of the children continuing their education, and how much responsibility they will carry. However, you cannot include provisions for child support within a prenuptial agreement. If you do, the judge may throw out that provision, or perhaps the entire agreement.

Our Family Lawyers in Michigan Can Help with Your Agreement

Prenups are of extreme importance in high net worth divorces and at Iafrate & Salassa, P.C., our Michigan family lawyers can draft one for you that is fair and enforceable by the courts. If you are about to get married, call us first or fill out our online form to schedule a free consultation and to learn more about how we can protect your best interests.

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