How to Protect Your Assets When You are Ready to Pop the Question
It’s finally happening! You are about to propose to the love of your life, or your significant other is proposing to you. You are finally going to be married! You are on cloud nine, but wait, take a minute to think it over. You don’t have to second guess your choice, but you need to think about the legal aspects of marriage.
Being married is not all about having a fairytale wedding at an exotic location. Marriage is technically a very legal situation with lots of assets involved. It may not occur to you at first, but you have to be smart and protect your finances and assets before tying the knot. Here are several ways you can do that:
Sign a Prenup
Prenuptial agreements are actually important legal tools that all couples should have in case of a divorce. No one plans on divorce, but it can happen. If it does happen, you have to make sure that the assets you bring into the marriage are wholly protected. So, it’s time to get a prenup and seriously discuss the matter with your soon-to-be spouse. First, individually consult with a local lawyer. For example, prenup help in Scottsdale will tell you how to get a prenup in accordance with Arizona law.
Avoid a Joint Trust and Get an RLT
Separate revocable living trusts (RLTs) offer better protection for both spouses when it comes to estate planning. Joint trusts can be a point of contention in case of a divorce. Joint trusts leave married couples vulnerable to spousal creditors and liability. Also, RLTs make it easy for each spouse to pass down assets without encountering ownership claims from the other.
Maintain Your Own Property Separately
If you bring in a property, like a house, to the marriage, you should manage it separately with non-marital funds if you don’t want to risk losing the house in case of a divorce. Don’t co-mingle assets you own individually. Otherwise, the spouse can claim a portion during divorce proceedings in any state.
Treat Inheritance Separately
Like with your own property, keep inherited property or other assets separately as well. If you co-mingle these with marital assets, they can be subject to division during divorce proceedings. Keep anything you inherit in a separate account with financial records in place. You can put inherited assets into a separate RLT.
Separate Real Estate
If you buy real estate before or after marriage, make sure it’s only your name that appears on the deed. If both names appear on the deed, it indicates to a divorce court that you originally intended your spouse to have at least partial ownership. If you don’t want your real estate holdings to be part of divorce proceedings, keep them separate as with your other assets. If you want to pass them on to your spouse in case of an unexpected death, the best strategy is to put that in a will.
Thinking about all the finances and assets right before you get married is undoubtedly unromantic. However, paying attention to your finances in advance will protect both you and your spouse in the future in case of a nasty divorce.