Prenup Agreement in High Net Worth Marriage
As common as they are, the potential of a divorce is something that engaged couples often don’t wish to discuss. Although, it may sound pessimistic to discuss prenup agreements, high net worth individuals may want to consider a prenuptial agreement so that a potential division of property later down the road is less stressful.
Who Should Consider a Prenup Agreement?
High net worth owners are highly advised to create a prenup agreement as they have more at stake in the event of a divorce. Additionally, business owners are encouraged to consider prenup agreements as well, as the division of a business is often a complex and contentious issue down the road.
Oftentimes couples sign prenup agreements not because they foresee a divorce happening, but because they want to quell family concerns regarding the distribution of assets down the road. Prenup agreements can also protect assets in the event of untimely death and may redirect funds to dependents or other family members.
What Are the Benefits of a Prenup Agreement?
As unromantic as it sounds, couples who at least discuss the option of a prenup often report that they feel eased by being proactive with considering their future. Sometimes the burden of a potential stressful divorce down the road can cause people to become anxious about marriage and can cause unwanted stress. Signing a prenup doesn’t mean that you want or anticipate a divorce, it simply means that you are aware that they are common and want to be proactive with making the distribution of assets less stressful for you, your partner, and your loved ones.
What Is the Process Like of Creating a Prenup Agreement?
As opposed to many divorces, creating a prenup is typically an unemotional process, similar to a business transaction. While it is significantly less stressful than most divorce proceedings, it is just as meticulous of a process. It is highly advised that both you and your partner hire an estate planning attorney so that you can ensure the agreement is fair and will distribute assets as intended. Additionally, it is highly recommended that partners be transparent about their assets and potential inheritances, as this will ensure that property is not overlooked.
How Do I Talk to My Partner About Creating a Prenup?
Although prenups are becoming more common, with an increase in the number of millennials signing prenup agreements, it is not an easy conversation to have. It is important to approach the subject with thoughtful consideration of the timing, place, and wording.
With any legal agreement, it is important, to be honest. Mentioning that it has always been something that was important to you and your family before you met your partner, or that you are following the advice of friends who have experienced a terrible divorce may help your partner have empathy for your request. It is also helpful to address the fact that a prenup agreement is significantly less timely, costly, and stressful than a complex divorce proceeding.
Approaching the agreement as equals is recommended. When both partners are involved with the creation of the prenup, there tends to be less concern and animosity with the legal agreement. Additionally, it is important to remind your partner that a thoughtful prenup benefits both partners as it reduces financial uncertainty for both parties. While it may temporarily create tension, many couples find that once they come to an agreement, they are able to move forward in their relationship.
If you would like to understand if a prenup is in your best interests, contact LPEP, an estate planning and family law firm in the Bay Area. Our team of dedicated professionals are committed to protecting your assets and have the resources you need to assist you with creating your prenup agreement.