Prenups are used to predetermine what happens to your marital and non-marital property in the case of a divorce. There are many reasons though why you may not have a prenup. If you marry young, you likely don’t have any assets of value when you marry. Many spouses consider a prenup unromantic – an indicator that one spouse doesn’t think the marriage will work. An experienced family lawyer advises spouses on how you can protect assets without getting a prenup.
In New Jersey, when spouses divorce, their marital property is divided on an equitable basis depending on the types of assets, their value, the financial circumstances of the spouses, the health of the spouses, and many other factors. Understanding how you can protect assets without getting a prenup is critical to resolving the equitable division of your property.
How to protect yourself financially from your spouse
There are ways to help answer – can you protect assets without a prenup? These steps include:
Keeping assets separate in marriage. While most spouses only have one house, many spouses each have their own vehicle. Titling each car in the name of the principal driver of the car helps clarify which spouse uses the vehicle – and also helps protect the other spouse from claims in the case of an accident. Businesses, unless they’re a family-run business, should be owned by the spouse who runs the business. Other assets can be titled in the names of the spouse who uses them most. If you owned the house before you married, consult with a family lawyer about whether you should add your spouse to the deed to the house.
Legally separating finances in marriage. Spouses can consider having separate bank accounts or separate bank accounts and one joint account. This is a common way you can protect assets without getting a prenup.
Keeping items you brought into the marriage or acquired through an inheritance separate. These assets are considered non-marital property as long as they’re kept separate. If you retitle the vehicle you owned before marriage in both names or use inheritance money to pay off the mortgage on the marital home – you will probably lose the right to claim the car or inheritance are non-marital. If you have non-marital property, you should use non-marital funds to pay off any debts or maintain that property
Valuing your business. If you own a business before you marry, then you should obtain an appraisal of the business to clarify what part of the business will be considered your non-marital property and what part will be marital property.
The more records you keep that identify – which property is non-marital property; the value of the non-marital property when you married; and the funds that were used to pay the taxes, loan payments, and maintenance payments – the stronger argument you’ll have that you should keep your non-marital property if you divorce. This means the more documentation, records of purchases and bills, you have, the better.
Does a prenup protect future assets?
If you want to keep your non-marital property in the event of a divorce, you should understand that the appreciation in value of non-marital property will be considered marital property when you divorce. The classic example is a home.
If you own a home worth $200,000 when you marry with a $150,000 mortgage – the equity in your home is $50,000, If you and your spouse pay off $75,000 on the mortgage and the property increases in value to $250,000 by the time you divorce – the equity in the home at the time of the divorce will be $250,000 minus $75,000 which equals $175,000. You should be entitled to keep the original $50,000. You and your spouse will equitably divide the remaining $125,000.
Understanding how the appreciation of marital property affects your assets is critical to answering – can you protect assets without getting a prenup?
Use of a revocable trust to help avoid the issue of – can you protect assets without a prenup?
One possible consideration is placing some of your funds before you marry into a revocable trust. You will need to appoint another person to be the trustee. The trustee manages the trust and makes distributions when needed. You may be able to argue when you divorce that any increase in value of the trust funds aren’t marital property based on the argument the trustee increased their value – not the marriage.
At DeTorres & DeGeorge Family Law, our divorce lawyers advise men and women who are about to marry – can you protect assets without a prenup or do you need a prenup? We advise spouses who are considering divorce about their financial and personal rights. We work to protect the security of you and your loved ones. To speak with a respected New Jersey family lawyer, call us at 908-691-2104 or complete our contact form to schedule an appointment. We have offices in Clinton and Morristown.