As you prepare to marry, it’s hard to imagine ever seeking a divorce.
But the truth is, nearly half of all married couples eventually go their separate ways. It’s always wise to plan for the unexpected and the unimaginable, especially if you have significant premarital assets that require protection.
Smith Legacy Law provides experience-backed legal counsel and advice to high-net-worth individuals and businesses everywhere we serve. As your lawyers for life, our skilled and knowledgeable attorneys can craft a plan to preserve your wealth, regardless of what the future has in store.
What Happens to Premarital Assets in a Divorce?
Most people assume they’ll be able to maintain possession of their premarital assets in a divorce. But in many states the truth is far more complicated.
In general, states consider all assets owned by either spouse to be marital property subject to fair and equitable distribution in a divorce, whether those assets were acquired during the marriage or not. Unless you and your spouse can reach a settlement on your own, the family court judge will consider many factors before deciding the distribution of property, including:
- The length of the marriage.
- The cause of the marriage’s dissolution.
- The age and health of each spouse.
- Their occupations, as well as the amount and source of their incomes.
- Educational level, vocational skills, and employability.
- Earnings capacity of each spouse.
- Opportunities for future acquisition of capital assets and income.
- Their contribution to the acquisition, preservation, or appreciation in the value of assets, including premarital assets.
From heirlooms and jewelry to bank accounts, brokerage accounts, and even interests in a trust or shares in a family business, proper planning is essential if you expect to retain possession of premarital assets in the unfortunate event of a divorce.
Pre and Post-Nuptial Agreements
Although many states do not recognize “separate” property for the purpose of divorce, a prenuptial agreement does allow for the protection of premarital assets. While it may not seem romantic in the run-up to your wedding day, taking the time to establish your rights ahead of any “worst-case scenario” can give both you and your intended spouse the peace of mind to approach the future with confidence.
Under most states’ laws, a premarital agreement can be drafted to address:
- The rights and obligations to any property held by either or both, regardless of where or when it was acquired
- The right to transfer, manage and control any property
- Distribution of property in the event of a legal separation, divorce, or death of a spouse
- Spousal support in the event of a separation or divorce
- The ownership rights to a death benefit from a life insurance policy
- The right to participate in a spouse’s retirement plan
- The choice of law governing the agreement
It is also possible to enter into a postnuptial agreement once you are married.
Some couples have an easier time reaching an agreement after they’re married. Others will draft a postnuptial agreement to account for changing circumstances, such as one spouse pausing their career to care for children. Postnuptial agreements are also helpful when one spouse is engaging in reckless spending, coping with addiction, or suffering from mental illness. Sometimes couples will even draft a postnuptial agreement when they’ve decided to separate but are not necessarily getting divorced.
Both prenuptial and postnuptial agreements are reviewable by a court. Keep in mind that most states only consider these agreements enforceable when:
- They’re written, not verbal.
- Are reasonably fair to both parties.
- Both parties have voluntarily entered into the agreement and had the opportunity to obtain the assistance of legal counsel before signing.
- There has been full disclosure of all assets, debts and income.
Learn More About Marital Asset Protection
Planning for the future means planning for the unexpected.
Our experienced and knowledgeable attorneys are ready to help you negotiate and draft a prenuptial or postnuptial agreement that will protect your rights and your wealth no matter where life takes you.
Contact Smith Legacy Law for your free consultation.
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Contact an Experienced Asset Protection Attorney Today
Marital asset protection can be complex, and the laws governing prenuptial and post-nuptial agreements vary greatly from state to state.
As your lawyers for life, Smith Legacy Law can help you determine which marital asset protection tools are most appropriate for you and your situation.