According to various estimates, that there are approximately 4.9 million high net worth individuals in the U.S. at any given time. While there is no set dollar amount to determine a high net worth individual, or HNWI, the term is generally used to denote a person with substantial liquid assets. More than 60,000 HNWIs in the U.S. are considered ultra-high net worth individuals with assets of more than $50 million. New York City, by most accounts, tops the list as home to the most HNWIs, with Los Angeles a distant second. Slightly behind Los Angeles is the Chicago metro area, home to more than a quarter million high net worth individuals.
As the number of high net worth individuals continues to increase in the U.S., so do the number of prenuptial agreements. Prenups are often signed in an effort to combat the possibility of losing a significant amount of money in the event of a divorce. They are especially important for individuals with complex assets—such as real estate or stock holdings—and those who own or run a business together.
There are, however, are several things a high net worth couple must be aware of when signing a prenuptial agreement. The importance of working with an attorney who understands the specific needs of high net worth individuals when drafting your prenuptial cannot be overstated.
Fraud and Hidden Assets
There are several factors that can make a prenup invalid. One obvious one is if the agreement is fraudulent: if one or both parties did not truly divulge all assets and holdings. In 2013, a Brooklyn court threw out a prenuptial agreement in a highly publicized high net worth divorce that rocked the family law world. The court determined that the real estate mogul husband “fraudulently induced” his wife into signing the agreement just four days before their wedding. It is not uncommon for a party to hide assets or fail to divulge them in the first place. If it can be proven that either party lied when drafting the agreement, the document may be thrown out.
Coercion and Unconscionability
A prenuptial agreement may also be considered invalid if it was signed by coercion. Coercion does not, in most cases, include an ultimatum of canceling the wedding but usually refers to physical threats or the use of drugs or alcohol to obtain a party’s signature. This, of course, can be difficult to prove. Again, the importance of a lawyer on your side cannot be ignored.
If a judge considers the prenuptial agreement to be too one-sided, he or she may also decide to throw it out. It is important to cover all your bases when drafting a prenuptial agreement so that you are ensured it does its job if ever put to the test.
Help for High Net Worth Individuals
Whether you are looking to develop a prenuptial agreement to protect yourself or you have one in place and you considering a divorce as an HNWI, contact an experienced Orland Park family law attorney. With our knowledge and skill, we can help you protect your assets and your future in both marriage and divorce. Call 708-518-8200 today for a free consultation at Kezy & Associates.