While prenuptial agreements are a common way to protect assets from a divorce, you don’t have to get one.
A prenup can cover as many or as few issues as you need it to.
To protect your assets, you should start documenting everything about your finances as soon as possible. This is a great way to avoid surprises later.
Keep Your Assets Separate
If you’re thinking of getting a divorce, you may be concerned about what will happen to your premarital property. The general rule is that property that you bring into the marriage will stay yours and a court won’t divide it, but there are exceptions to this rule.
If you live in a community property state, inherited assets are typically considered separate property. But if you commingle those funds with marital money, such as buying a house or paying for a home maintenance bill together, the inheritance could become joint property and would then be subject to division during divorce.
To prevent this from happening, create an inventory of all your non-marital assets, including bank accounts, investments and retirement accounts. This can help you to protect your assets and avoid legal pitfalls.
Set Up a Living Trust
If you have assets that you want to protect from creditors, you should set up a living trust. A living trust is a document that names someone (called a trustee) to manage your assets and distribute them to beneficiaries after you die.
During your lifetime, you can transfer most types of property into a trust. The trust document will outline your wishes, and you can name a trustee or co-trustees to act on your behalf.
A living trust can also help you avoid the expense and time-consuming process of probate when you die. Probate is a court-supervised process where a judge oversees distributions of assets to the people you wish to receive them.
It can be difficult to think about death and what will happen to your assets when you’re alive, but a living trust can help make sure that your wishes are carried out. It can also give you peace of mind that your family will be protected should something go wrong.
Keep Records of Your Assets
One of the best ways to protect your money without a prenup is to keep records. Documents like bank, brokerage and retirement account statements can help you establish the value of your assets and inheritances in the event of a divorce.
The more you can prove that your non-marital property has appreciated in value because you and your spouse have taken action, the stronger your case will be for keeping that asset separate after a divorce.
You also should keep records of any non-marital inheritances or gifts you receive. These are often deemed non-marital property as long as you can provide evidence that your spouse did not know about the gift or inheritance when you married.
Keeping records of these assets can be a difficult task, but it is essential to protecting your family’s financial future in the event of a divorce. If you have any questions regarding how to protect your assets, contact an experienced Maryland divorce lawyer today.
Talk to an Attorney
While a prenuptial agreement is typically associated with celebrities and the extremely wealthy, it can be beneficial for people of all backgrounds and situations. It can protect your assets from a divorce and provide instructions on how to distribute those assets in the event of a divorce.
If you have significant assets and you’re not sure how to protect them in the event of a divorce, it’s always best to consult with an attorney. He or she can help you determine whether a prenup is the right choice for your situation and how to implement it.
While the process of negotiating a prenup can be uncomfortable, it’s important to keep the conversation as positive and open as possible. Both sides should feel heard and valued, and both partners should be clear about what they want. A well-crafted prenup can cement the relationship and help couples communicate effectively during and after marriage. It can also help you come to an understanding of each partner’s financial goals, debts, and assets.
