In Florida, owners of high-value properties and other financial assets have relied on prenuptial agreements to help protect their wealth and resources in the event of a divorce. Unfortunately, many have found out the hard way that a prenuptial agreement does not always protect their assets, and their properties can become assets of their former spouses. While prenuptial agreements do have value, there is more to consider in order to ensure iron-clad protection for your valuables.
What is a prenuptial agreement?
A prenuptial agreement is used in the event of a high-asset divorce to protect a spouse’s wealth and property that was created prior to the marriage. The prenuptial agreement predetermines how assets will be divided during the divorce and is signed before the marriage occurs.
Advantages of a prenuptial agreement
Prenups can protect assets that are meant to pass to children should one parent die and the other remarry. These documents are helpful in preventing potential disputes in the event of a divorce since the division of property has already been agreed upon. They can also help to protect one spouse from being held responsible for the other spouse’s debts.
The problem with a prenup
Prenuptial agreements require that all assets be disclosed to the other spouse prior to the signing of the contract. This is the very thing that many want to avoid in order to limit the likelihood of their future spouses trying to gain some ownership of those assets. If all financial assets are not disclosed prior to the prenup, the agreement will not be valid at the time of divorce.
Using an irrevocable trust as a solution
By placing high-value assets in an irrevocable trust, they will no longer be entanglements should there be a divorce. This is because the spouse literally transfers the ownership of the asset to the trust, and they have no control of the trust or the assets.
Divorce between spouses where there is wealth and property tends to be much more complex than most other divorces. It could be a good idea to seek the counsel of an experienced high-asset divorce attorney who could have specialized knowledge that would help to protect your valuable belongings in event of a divorce.