A prenuptial agreement (“prenup”) has normally been used to declare property that one already owns prior to the marriage as separate property of the future spouse. What about future property then? Does a prenup protect future assets?
For example, you incurred debt for your business prior to the marriage (which is considered separate debt), but you are expecting your business to boom during the marriage and to receive a lot of income from it. Without a prenup, the business debt before the marriage is separate debt but the future business income is marital property. Can you use a prenup to protect future assets?
Yes, you can use a prenup to protect future assets, for as long as those assets are clearly defined and described.
The heart of a prenup is a list of assets of future spouses. This list is an indication of whether such property is separate or marital property. But what about assets you expect to receive in the future?
If you like to protect future assets, you must describe the asset in particular detail. A general description will possibly be less effective in having it determined to be separate property. For example, if you’re expecting to receive trust assets in the future, you should describe the trust in detail, i.e., the name of the grantor, when it was established, when you expect to receive it, etc. If you would like to designate all future income from your business as separate, you should identify the business by its corporate name.
Another strategy to protect future assets is by retaining a separate account for them. Keeping a separate account for the income from your business or money inherited from your family, and not commingling it in a joint account with your spouse, will show to the divorce court your intention to keep this property separate.
You can also file tax returns separately than jointly so you can maintain the distinction between your separate and marital property.
Aside from property, other issues that can be addressed in the prenup are:
If you are engaged to be married and have debt or property, you should discuss with your future spouse these financial issues and consider discussing your options with a prenup lawyer. When you have significant debt or property or children from a previous marriage, a prenup lawyer can help you draft a prenup agreement that will prevent a contested divorce, saving you legal expenses in the future. Should you need a prenup lawyer, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York City, Brooklyn, NY and Queens, NY. You can call us at 212-233-1233 or send us an email at [email protected].