Prenuptial agreements, otherwise known as antenuptial agreements or prenups, are becoming increasingly popular as several individuals are postponing marriage until later in life and often after amassing personal wealth and significant separate assets. However, as prenups become more popular, they are also garnering a bad rap. Among couples seeking to wed, prenup is often viewed as a dirty word because it suggest to some that the party suggesting it is planning for divorce instead of focusing on the marriage. Because of this, many chose not to discuss prenuptial agreements in order to avoid conflict.
But, just because the topic of prenuptial agreements may be a touchy one doesn't mean that a future spouse seeking to protect his or her separate assets in the event of divorce are out of luck. There are alternatives to prenuptial agreements that may allow an individual to ensure that his or her separate property is protected in the event of divorce, and these alternatives do not require their future spouse's consent or agreement.
Keeping separate property separate.
One of the simplest ways of ensuring that any separate property you have obtained prior to marriage is maintaining the separate nature of this property after marriage. This may sound simple, but during the course of marriage, especially a long term marriage, maintaining separate accounts and separate assets may be extremely difficult. For this reason, many individuals look to the options below in lieu of prenuptial agreements.
Trusts.
A trust is a relationship created at the direction of an individual, where that individual entrusts one or more people, often referred to as trustees, to hold the individual's property subject to certain duties, and to use and protect that property for the benefit of others. Trusts may either be used by the family of a future spouse to protect an inheritance or family assets in the event of divorce, or a trust may be used by a future spouse to protect his or her individual assets. Trusts offer asset protection in the event of divorce, because once money or property has been placed in trust, it is deemed to be the property of the trust for legal purposes. If a spouse does not legally own property, it generally may not be subject to equitable distribution upon divorce. There are several types of trusts, and there are very stringent procedures that must be adhered to in order to ensure a trust is validly created and effective. If you are looking for an effective method of protecting your assets upon divorce, a trust may be a good option. Speak with a family law attorney for more information and details concerning how to structure your financial affairs prior to marriage, in order to protect your separate assets in the event of divorce.