When a prenuptial agreement isn’t an option


Creating a thoughtful, sensible prenuptial agreement is an important step in the wedding planning process. However, many choose to avoid these agreements because it can be uncomfortable to suggest a prenup, much less discuss the specifics. 

If your fiancé simply will not agree to enter a prenup, here are some strategies to protect your family business, family legacy assets and other assets acquired prior to marriage. 

  1. Keep separate property separate and maintain titles to real property. To bolster the likelihood premarital real property and inheritance assets will be considered your separate property in the future, keep all separate property titled in your name alone. Place any gifts in your separate account and don’t contribute funds that are marital property to your separate property accounts.​ Create and use a joint account for household/family expenses.
  2. Document asset values just prior to the wedding.  Include account statements, property tax bills or other documentation showing asset values as of that date. For hard -to -value assets such as a business, consider obtaining a valuation prior to the wedding. This documentation will allow you to more easily identify growth or value additions that have occurred during the marriage.
  3. Create a trust or two.  A revocable trust  and a domestic asset protection trust, or DAPT, can be valuable. While not an asset -protection vehicle, placing premarital funds into a revocable trust can help segregate and identify assets as your separate property. A DAPT is an irrevocable trust with special provisions that allow you to both create and be a beneficiary of the trust, protecting the assets from your spouse in a divorce.
  4. Ask to have your inheritance held in trust.  If you expect an inheritance from family, asking them to structure your inheritance to be held in trust rather than given to you outright can make assets available to you but protected from creditors.
  5. Enter an agreement restricting ownership of the business.  You and other owners of your business can restrict the transfers of ownership interests only to the existing owners and descendants. Such agreements are common and can prevent your ex-spouse from becoming an owner of the business.
  6. If your family has an unwritten policy of requiring family members to enter prenuptial agreements, put that  policy  and the  reasons  for the policy, in writing. Doing so helps family members understand the importance of the agreement, provides the vocabulary needed to describe its importance to a future spouse and helps future spouses understand the agreement’s purpose isn’t due to the family’s feelings about him or her.  

Because  property and marital laws vary from state to state, consult your attorney to ensure they work in your jurisdiction.

About the author: Susan Gell Meyers is a partner at Warner Norcross + Judd LLP. Sheusan concentrates her practice on planning for high net worth individuals, their families, businesses they own and family offices that serve them. She can be reached at smeyers@wnj.com

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