Importance of a Prenup for High Net Worth Divorce
Premarital agreements are important for any couple in Chicago, regardless of the amount of money each has or each plans to make in the future. However, premarital agreements—also known as prenuptial agreements or prenups—are “crucial” for couples entering into high net worth marriages, according to an article in Financial Advisor Magazine. Indeed, in the event of a high net worth divorce, a prenup can reduce complications involving finances, and it can also protect assets while ensuring that both spouses are financially secure.
What else do you need to know about premarital agreements in Illinois?
Carefully Drafting a Premarital Agreement
In Illinois, prenups are governed by the Illinois Uniform Premarital Agreement Act. In Illinois both parties must be represented by at attorney for a prenup to be valid. It is extremely important to work with an experienced Chicago family lawyer when drafting your premarital agreement, as any hint that the agreement was not entered into voluntarily by one of the parties, or that the agreement is unconscionable, can result in a court deciding that the prenup is not enforceable. Especially when it comes to high net worth marriages, it is essential that you take all the necessary steps to show that your spouse entered into the prenup understanding the financial implications.
Why else is it important to carefully craft the language of your premarital agreement? In addition to making sure that the court will enforce the prenup in the event of divorce, the language contained in the premarital agreement can drastically change the outcome of your divorce settlement. Prenups can have a big impact on divorces in which much of the wealth was accumulated during the marriage.
The article in Financial Advisor Magazine cites two different cases of high net worth couples, with one securing a premarital agreement and the other couple going without a prenup. In the case of the couple without a premarital agreement, much of the wealth accumulated during the marriage (between $11 and $17 billion) was divided between the spouses nearly equally. Differently, the second couple entered into a prenuptial agreement before the marriage, specifying how the nearly $7 billion accumulated during the marriage would be divided in case of divorce. The court upheld the prenuptial agreement, and it ensured that both spouses were financially secure while protecting the assets of the payor spouse.
How to Draft a High Net Worth Prenup
What steps do you need to take to draft an enforceable premarital agreement? First, it is important to understand what can and cannot be included in a prenup. Under Illinois law, couples can contract about the disposition of property, spousal support, and other assets or debts in a prenup, but they cannot contract about child support in the event of divorce.
When coming to an agreement about how assets will be divided, the article emphasizes the following to ensure that you have an enforceable agreement:
High net worth divorces can be extremely complicated, but a premarital agreement can help to protect parties in the event of a divorce. If you have questions about preparing a prenup or filing for divorce in Illinois, an experienced Chicago divorce lawyer can answer your questions today. Contact M. Scott Gordon & Associates to discuss your case.