Marriage for the Wealthy: The Prenup
Points to Have in Your Pre-Nup
The prenup is a way to protect your respective wealth and property before the marriage. Whatever is acquired after the marriage, the laws of distribution of that money and property are also laid out in a prenup so that there are no ambiguities in case of a divorce or death, whether you are wealthy or not.
Usually thought to be unromantic and cold compared to the emotional backdrop of getting married, people usually forget that marriage too is a contract with clauses that protect the two parties. However, enforcing marriage contracts is difficult whereas prenups are valid in all 50 states and provide a peace of mind that either spouse is covered in case things change for the worst. And let’s face it: we all think that way, sometimes drawing lines through informal, verbal exchanges. If you own a family business you certainly do not want it exposed to a risk of liquidation in case of divorce. The signing of a prenup is a preventive measure that assures both man and wife of responsible wealth management so that you can save your family business and other wealth in case something goes wrong in the future.
Celebrities are pretty savvy at wealth management. The most interesting features of celebrity prenups are clauses that hold the men responsible in case they cheat. Justin Timberlake will pay $500,000 to Jessica Biel if he cheats. Catherine Zeta-Jones will get $5,000,000 if Michael Douglas cheats. This proves one point though: fidelity is of prime importance to the woman, celebrity or no celebrity. In case of Nicole Kidman, she will pay $640,000 to Keith Urban for every year if he does not use drugs; here drugs are a greater issue than fidelity! It proves though that the prenup can be a powerful tool in the marriage of a wealthy couple, creating an agreement that both partners can live by. It’s a formal contract of marriage that can effectively create the terms of the marriage.
Prenups are a prudent step in wealth management. It safeguards your money and your possessions that you bring into the marriage, especially if you are the wealthy partner. Assets like rental property or family business are performing assets: they generate the money that pays the bills. You don’t want to put these on the line under any circumstances, especially in case of a bad divorce where liquidation orders are common.
Equitable Distribution Of Assets Acquired After Marriage
Assets you purchase after marriage belong to both of you. If you or your spouse has children from previous marriages, inheritance issues are best settled through a prenup. This may also include investments in stocks and bonds.
Save On Court Fees
A well defined prenup saves plenty of hassle. If things do go bad, the legal fees can be astounding and sometimes unbearable. Good wealth management always saves on unnecessary expenses and a prenup is a document that does just that.
A Good Investment
Prenup is a good investment of time and effort that protects not only the couple, but also the children. Think of it as two people making a joint will.