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Protect your assets in the event of a divorce

Premarital agreements, also known as prenuptial agreements, can be helpful for many soon-to-be wed couples in Virginia. If one or both partners is coming into the marriage with significant assets or has their own business, a premarital agreement can address who will keep these assets in the event of a divorce. Even couples who are starting out in their marriage with few assets of their own can use a premarital agreement to lay out who will get what with the assets they intend to purchase during the course of the marriage. However, for many reasons, not every couple executes a premarital agreement prior to walking down the aisle. Fortunately, there are still ways these couples can protect their separate property while married, just in case the marriage doesn’t last.

Some couples intend to open joint bank accounts once their married. While having a joint bank account can be convenient, it is important to understand that the funds in it may be considered marital property, even if separate funds are placed in it, due to commingling. So, it can help for each partner to open their own separate bank account as well. The joint bank account can be used to purchase marital property, and the separate bank account can be used to pay for items that a spouse wants to keep separate. In addition, gifts and inheritances can be protected by being placed in a separate bank account.

Sometimes a person already owns a home prior to getting married. However, they should be careful when it comes to paying the mortgage or maintaining the home while married. If they do so using marital assets, the appreciation in the home may be considered marital property.

Finally, even if a couple didn’t execute a premarital agreement before they got married, it is not too late for them to execute a postnuptial agreement while married. A postnuptial agreement can address many of the same topics as a premarital agreement. Having an agreement in writing, rather than having a simple “understanding” of who will get what in a divorce, can make a divorce run smoother.

Even in the absence of a premarital agreement, couples have options for protecting their separate assets should the marriage not last. However, state law varies and every couple’s situation is unique.

Source: NerdWallet, “You’re Married, but Your Assets Don’t Have to Be,” Liz Weston, Feb. 15, 2018

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