Do you need a prenuptial agreement or other preparations prior to marriage or remarriage? In short, yes, unless you want your premarital assets divided in your divorce.
PRENUPTIAL OR ANTENUPTIAL AGREEMENT
A prenuptial agreement (at the link see especially section B) is a pre-settlement of many of your potential divorce issues, it says, in effect, that in the event of a divorce certain assets will be split in certain ways. Yes, it’s a little cynical to have one, but with divorce rates in exceeding the national average, it’s foolish not to have one if you have anything to protect. Common matters that need protection include retirement accounts, real estate, and future wages (in the form of spousal support alimony).
ANOTHER POSSIBLE PREPARATION
If you and your potential spouse have determined (usually because they freaked out when you asked about a prenuptial agreement, or you know that they would freak out if you dared to ask) that you will not have a prenuptial agreement (how romantic!), there are still things you can do to protect yourself which consist of the following actions: (1) record your assets (2) track your assets and (3) preserve that information.
Initial Recording is pretty easy for most people, just make a record of your assets. If, for example, your assets are retirement accounts, get statements together showing exactly how much money you have and where it was when you got married. If your assets are pieces of real estate, get copies of all deeds and mortgages together and clearly dated. The reason you may need these things is that if you got divorced 20 years later it may be hard to tell which of your assets precede the divorce and which do not, the burden is on you to prove your assets are your separate property, failure to prove it can result in it being divided by the Court.
Tracking Your Assets. Once you’ve established a record of your premarital assets you need to track them. Don’t mingle them with your spouse’s separate property or with joint marital property (i.e. don’t add your spouse to the title to your pre-marital car or house, don’t put her income from during the marriage into your pre-marital retirement account, etc.). Keep periodic updated paperwork on the status of your premarital property; more often is better, but honestly once every 6 months is probably more than accurate along with any time you make any major change to the asset (for example, changing your IRA from one company to another). If you get divorced later, your lawyer will thank you, as will the future you when you need those undivided assets to retire or otherwise enjoy your post-marital life.
Preserving the Information. All the foregoing is useless if you fail to preserve the information. You should not keep the information solely in your home, a spouse planning on divorcing you will be tempted to tamper or destroy the records to make your case more difficult. Keeping it physically offsite (in a safety deposit box for example) can be daunting, especially as the records become more voluminous with the passage of time. At & , P.C., we recommend scanning such records into a computer storage system and keeping them offsite online at a location such as Google Drive. Google Drive, as an example, is free and provides several gigabytes for data storage which is more than enough for most situations. More secure storage can no doubt be found at whatever cost you’re willing to bear.
If you enter into a prenuptial agreement or, failing that, diligently record your premarital financial information, then your case will be smoother, if your marital situation deteriorates.
Call us if you need more information on this topic!