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More than half of all marriages end in divorce, yet very few
people take the steps necessary to protect their assets from
that possibility.
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A pre-nuptial agreement is the most basic legal tool to protect
assets, but there are also more advanced tools available.
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Pre-nuptial agreements may not only define the inheritance
rights of various heirs, but can also protect the less-wealthy
spouse if he or she is giving up a lucrative career for the
marriage.
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Pre-nuptial agreements can also help maintain control of family
businesses, as well as clarify which state laws will apply in
the event of divorce.
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If no pre-nuptial agreement exists, the marriage assets will
be divided according to state law.
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In order for a pre-nuptial agreement to be
binding, the agreement should be not overtly one-sided and there
must be full disclosure of both parties’ finances. Any
last-minute changes may not be enforceable.
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The agreement must be in writing, but changes
may be made orally. Courts will be reluctant to interfere if
it’s clear that both parties have abided by any changes.
The agreement should, however, have a severability clause that
makes it clear even if one clause is violated the rest of the
agreement remains in force.
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The agreement should also make clear that
there aren’t any agreements between the spouses other
than those in the pre-nuptial. That will prevent either spouse
from claiming oral promises were made that must be fulfilled.
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Don’t include provisions that encourage
divorce, like allowing a spouse to receive more in divorce than
he or she would otherwise receive.
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If you’ve entered in to a pre-nuptial
agreement, avoid placing any assets in joint ownership, as this
may supersede the provisions of the agreement.
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If you give a significant gift to your spouse,
it should come with a signed memo explaining its purpose. That
will avoid any later confusion over possible asset protection
schemes.
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If you cohabit, it’s best to decide
in advance how you plan to split your assets. Otherwise, the
courts will decide for you.
Disclaimer: This article is provided for information
use only. It does not take the place of an attorney, a tax advisor,
or an accountant. Always seek out the advice of a licensed professional
before undertaking any significant change in your financial situation.
We at Valerie Fitzgerald and Associates realize that you are in the information gathering stage of your purchase and we respect your privacy. Should you have any questions, please feel free to email us at info@valeriefitzgerald.com or call us directly at 310-285-7515. If you or anyone you know is looking to buy or sell a home, please note that we can provide detailed information and access to:
You can count on the services of Valerie Fitzgerald and Associates to provide you with information you can trust.
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