When a person with a high-net worth is engaged to be married, they may want to consider entering into a prenuptial agreement, known as a premarital agreement in Florida. After all, some people have established high-paying careers, may own a home or may have received a substantial sum of money prior to getting married. Moreover, some people may anticipate earning a significant income while married or accumulating other valuable assets while married. Prenups are useful, because they can protect both spouses’ financial interests in the event of a high net worth divorce.
First, prenups can designate which assets are to be separate assets and which assets are to be marital assets. This is significant when it comes to property division, because Florida is an “equitable distribution” state. This means that marital assets will be divided between the spouses in the event of a divorce, and it may not be an even 50/50 split. A prenup can designate an asset as separate property and thus not part of the divisible estate, even if that asset was acquired during the marriage.
Sometimes, a person enters a second marriage with a child from their previous marriage. In a prenup, a person can designate what assets that child is to inherit. This can be especially useful for high net worth individuals who have substantial estates and want to ensure their child is provided for. Similarly, if a person a family business, a family heirloom or any other asset that they wish to keep within their birth family, this can be specified in a prenup.
As this shows, people who come into a marriage with a high net worth may want to consider executing a prenup before walking down the aisle. When there is a significant amount of wealth at stake in a marriage, it is important that couples come to an agreement as to how that wealth will be handled. This can be beneficial even if a couple never divorces, as well as if the marriage does not last.