While discussing what might happen after your relationship potentially comes to a halt might not be the most romantic topic, it doesn’t mean it shouldn’t be talked about. Preparing for a wedding can be exciting, and planning ahead for your futures together is an equally important step prior to your big day. Prenuptial agreements are great for those seeking to protect their assets in case of a divorce, but there are still ways to protect those assets without one.
Preparing Your Futures Together
Prior to starting a new life together, it’s important to take a look at what you and your partner are bringing to the marriage financially, including both the individual’s assets and debts. If your partner has debt, when you combine your assets together, your assets are now accessible by your partner’s creditors. Going through all this might feel very personal, but having this conversation will only benefit the both of you later down the road in handling and maintaining your assets, in a successful marriage or not.
If you had an account or funds prior to your marriage, and want to keep that account as separate property, it’s vital to keep those funds separate from your partner’s. If you co-mingle these funds, they become marital property which is susceptible to being divided by the courts or by creditors. By opening a new joint account together and depositing shared funds in it, you’re able to use this account for any finances as you continue forward in your marriage, without risking any of the funds in your pre-existing personal account(s).
Consider a Post-Nuptial Agreement
Maybe you and your partner are already married and you’re interested in protecting your assets moving forward. Considering this agreement doesn’t automatically mean someone is looking for divorce, there are plenty of reasons one can wish to define their assets clearly. Parents of children from previous relationships or marriages might want to make sure that their children’s inheritances are protected in case of divorce. Legal troubles, inheritances, lottery winnings, significant increase in salary, and other life occurrences can also lead to protecting certain assets against uncertainty in the future.
Keeping Real Estate Separate
Regardless if you and your partner are both sharing a new home together, if the home is in your name, you should take care of payments using that account that is solely yours. When filing taxes later, your accountant will prepare them separately using your name and the funds from your separate account. While basic maintenance for your place can use funds from the joint account you share with your spouse, any renovations that increase the value of your property should come from your account to show that the increased value is for your individual property, not property shared with your partner.
Create a Revocable Trust
By putting funds in a revocable trust, you have an added layer of protection, and will be able to manage said funds in the duration of your marriage. This kind of trust involves a trustee, a third party that is responsible for managing these funds. Putting pre-marital funds into a trust also removes the risk of commingling funds later which can eliminate claims protecting your personal assets.
The most effective way to protect your assets without a prenup is documenting everything clearly. Organizing and keeping important records from the very beginning of your marriage can be helpful later when you observe things like retirement funds or other bank accounts collected prior to your commitment. If either you or your spouse are business owners, it is important to get a valuation of your business before your marriage. Keeping record of your business’ value before appreciation can be beneficial in the event of divorce, keeping you protected from having any of the current value of your business be threatened. The more records you have of which property is non-marital property, and the purchases and bills surrounding that property, the better your case later in keeping that asset separate.
Consider Professional Advice
Having these conversations can be a challenge, and having a trusted attorney as a third party to offer insight with your assets and accounts can avoid tension, and keep your future planning professional rather than personal.
At Azemika Law, our practice is devoted to the field of family law. We efficiently handle cases involving divorce, dissolutions of partnerships, child custody, abandonment, and adoptions. Serving Kern County for the past 28 years, we provide all of our clients with knowledgeable and affordable representation.
We understand that while marriage is an exciting new chapter in your life, making decisions for the future can be a lot to unpack.
Contact us today to help protect your individual assets and create a clear plan for you and your marriage.