Money is an important premarital conversation.
You are getting married.
Your life has become a flurry of planning for venue, food, florists, and clothing.
Certainly, the plans are important to the wedding.
However, it is also important to prepare for your marriage beyond the big day.
According to a recent Wealth Advisor article titled “How to Protect Your Assets Without a Prenup,” discussing finances is key to preparing for your marriage.
Unless you are getting married right out of high school or college, you probably will be building off of two distinct lives.
You may have assets saved.
Your spouse may have student debt.
If either of you were previously married, alimony and child support may be a reality.
In merging two separate lives into one, you may consider a prenuptial agreement.
You are not planning on divorce.
You are merely protecting what you have.
For example, keeping certain assets separate could protect at least one of your incomes from creditors.
It becomes a safety net for your life together.
If a prenuptial agreement is not an option, there are still ways to protect your assets.
Keep separate accounts.
The money you brought can remain your money.
You can open a joint account together after marriage as your household "operating" account.
Any money you make after marriage can go to this account and be used for your life together.
Title property separately.
If the home is yours and you choose to keep it under your name, it should be your responsibility.
Any improvements and payments should be paid from your separate account.
Keep organized records.
This can help protect the property as your own.
If you make acquisitions with your separate account, you should keep records.
This shows the acquisitions are yours alone.
Also do this with gifts or inheritances.
Showing separation of moneys and assets via a detailed paper trail will help establish and confirm ownership should it be required at a later date.
It should be noted that some appreciated assets could be deemed marital property.
How is this determined?
If the property appreciated passively such as a public stock, it is separate if under your name.
If the property appreciates actively, the appreciation could be considered marital property.
A house would be one example of active appreciation.
It is helpful to include others in your financial planning as a couple.
An experienced estate planning attorney or financial advisor can educate you on your options.
Reference: Wealth Advisor (May 19) “How to Protect Your Assets Without a Prenup”