Four reasons why wealthy couples use postnuptial agreements

Disputes over money can roil a lot of divorces, especially when it comes to couples who have a lot of wealth. High income couples who want to cooperate with each other recognize this fact and try to resolve asset issues before a divorce even looms on the horizon. One way wealthy couples can do so is through a postnuptial agreement.

According to Fox Business, high income couples have particular reasons for wanting to compose postnuptial agreements, which often involve how to divide money and property if the couple decides to end their marriage. Here are four reasons why a wealthy couple may decide to draft a postnuptial agreement.

Addressing sudden wealth

A couple may live on modest means, when all of a sudden, one of the spouses has suddenly come into a lot of money from a new job, or the spouse has created a valuable piece of intellectual property like a bestselling book. When a couple experiences a rapid increase in money or assets, they may create a postnuptial agreement to limit how much money the high earning spouse has to pay to the other spouse in a divorce.

Separating real estate

In some marriages, one or both of the spouses will own their own real estate. Generally, a court will consider these properties separate property in the event of a divorce. However, if a spouse uses a property to generate income for a household or if another spouse contributes money or work towards a property, it may become marital property. Postnuptial agreements may help keep properties owned by each spouse separate.

Clarifying matters of inheritance

High income couples also use postnups to address inheritance issues. If a couple has children, the spouses may want their children to get a large inheritance. However, some situations may become complicated if a spouse has children from another marriage or outside of marriage. A postnuptial agreement can help clarify how to pass on assets to children in these situations.

Preventing debt burdens

Some high income earners carry debt and do not want their spouses to become burdened with their debt if they divorce. Couples concerned about debt can work this out in a postnuptial agreement. According to FindLaw, they can make sure that each party to the agreement is responsible for his or her own debts and do not pass it on to the other spouse.

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