Marriages can be hard to plan for, particularly for the wedding itself. However, what people might not consider before getting married is financial planning. Few people enter into marriage expecting to get divorced. The ceremony is, after all, a declaration of a lifetime commitment. Life rarely turns out how we expect, however, which is why planning ahead could save you time and money later. Here are our top tips for protecting your assets before the marriage.
Sign a Prenup
The most practical people entering into marriage make what is called a prenuptial agreement (prenup), which can clarify how the property will be divided after your death or during a possible divorce. It can outline the terms of your marriage and help keep separate property separate, including assets you brought into the partnership. For example, if you own a business on your own, specifying the company will remain yours in the event of a divorce can prevent a long, stressful legal battle if your spouse decides to challenge you for it during property division.
Keep Finances Separate
In addition to a prenup, you and your spouse could create a new joint account together that will remain separate from your previous accounts. This will allow you to set aside money for sharing, such as pooling together for the mortgage, home renovations, groceries, and so on, while keeping your retirement accounts separate. You should also not use your separate funds to pay for assets during the marriage or to cover household expenses. Otherwise, those accounts might later be considered communal property during a divorce.
Keep Accurate Records
Make sure all costs are accounted for by keeping accurate records. Likewise, make sure each separate character of your property and its value is recorded as close as possible to the date of the marriage. For example, if you own property, get a copy of the deeds or the HUD-1 Settlement Statement (a document that lists the funds payable at closing). If you have stocks, get formation documents, corporate records, or minutes to show ownership. You should also keep bank and brokerage account statements from the date of the marriage.
Don’t Attempt to Hide Assets
If you and your spouse do end up divorcing, it’s never a good idea to cover up any assets from the property division process. Following the money always leads investigators to where your funds might be going, which means tracing it to offshore accounts or to hidden lovers. Prudent spouses going through divorces can hire forensic accountants to help them ferret out any hidden funds that might belong to both partners, and these analysts are good at their jobs. It won’t look good in court if your marital funds are being spent frivolously on a lover or, for example, a bad gambling habit. The judge may decide to rule in your spouse’s favor in court proceedings.
Make sure you and your spouse protect yourselves from potential pitfalls later in the marriage. If you need help getting a prenup started, don’t hesitate to call us. Our attorneys can give you great legal advice on the best options to ensure both of your assets are protected before getting married. We have more than 40 years of collective legal experience to offer your case. Let us see what we can do for you.
Contact us at (800) 822-5170 or fill out our online form to schedule a case consultation today.