YOU HAVE THE RIGHT THE BEAU; YOU WENT TO THE BRIDAL SHOW; BUT DO YOU HAVE THE RIGHT FINANCIAL PLAN?
You have likely traveled throughout the state of Michigan to attend bridal shows and/or to find the right dress. But have you considered what to do with your assets now that you are planning to wed? Most people spend more time and money planning their wedding than protecting their valuable assets from dissolution. Do you need a prenuptial agreement? Some people do not need a prenuptial agreement; however, some people may have assets of a significant value that should be protected, if possible. Since you spent so much time and effort on planning the wedding, why not take a few moments to protect valuable assets from division should the marriage end?
Separate vs Joint Assets
The minute the vows are complete and the marriage is legal, every dollar earned or lost during that marriage is shared evenly, or 50 cents on the dollar per spouse. There are, however, assets/debts that may qualify as separate property and may also qualify as a separate asset, if the marriage should end. To qualify as separate assets/debts, the property must have existed before the marriage and not have been comingled with other martial assets.
For example, if, before the marriage, there were stock investments or bank accounts, those assets should remain separate assets, as long as those accounts existed separately throughout the marriage and there were no contributions of money earned during the marriage into those accounts. If it can be shown that those accounts remained separate from the marital assets, those assets may remain separate and most likely not be divided by the courts between the parties. Martial money contributed to invest into a house owned before the marriage without any debt, for example, may take the property out of the separate property category.
Another example, especially for second, third, fourth…. marriages and/or minor children from past relationships, would you want to protect your pensions, 401ks, and/or other retirement accounts from division? You may want to keep those assets separate, if they existed before the current marriage, to ensure that marital monies are not commingled to make that asset a marital asset to be divided if the current marriage should end. The interest and passive growth on those investments during the marriage will most likely be split with your spouse, if the asset was commingled with marital assets. Your children may be disinherited as well from receiving those assets.
Don’t Dread a Pre-Nup
Your preexisting financial assets can be protected with a prenuptial agreement. To accurately evaluate whether you should protect your assets with a prenuptial agreement, you will need to consult with an attorney. An attorney can review the evidence and advise you, based on the information provided, whether the asset is likely or not likely to be a martial asset or debt or whether a prenuptial agreement will benefit your estate.
Torree J. Breen is the chair of the Family Law Practice Group and is a member of the firm’s Litigation Group. She also serves as Secretary on the firm’s Board of Directors. Ms. Breen specializes in family law, divorce, child custody disputes, no-fault litigation, insurance coverage, and handicapped accessible housing coverage. In 2016, Ms. Breen was awarded a Regional Leadership Award by the Women’s Lawyers Association of Michigan for her outstanding legal, leadership and mentoring skills in the community. Ms. Breen was selected as one of the Top Ten Family Law Attorneys in Michigan in 2014 and 2015 by the National Academy of Family Law Attorneys (NAFLA). She was recognized as being among the Top Ten Family Law Attorneys as selected by The American Institute of Family Law Attorneys (AIFLA) for 2014, 2015, and 2016.
Ms. Breen has received a Certificate of Completion in the area of Family Law issued by the Institute of Continuing Legal Education and the Family Law Section of the State Bar of Michigan.