I am regularly asked how to preserve separate (pre-marital) assets. An attorney would recommend a pre-nup. The problem with a pre-nup is that it can hurt more than help. Think of how it translates: “I love you, honey, BUT…” In psychological terms it introduces a confusion of a commercial agreement with an emotional commitment, which is bound to create some distrust and suspicion if(when) a serious conflict arises during marriage (which will inevitably happen in a long term relationship just because it lasts long enough). Essentially, the questions you should ask yourself are: 1) Can I preserve my separate assets WITHOUT a pre-nup? and 2) Are these assets worth protecting at the expense of the erosion of my partner’s trust? True, there are some kinds of assets that need a pre-nup protection. An already profitable business can be one. Real estate can be another, especially in situations when there are legal complications related to the ownership. If you have assets you want to preserve for the benefit of children from a prior marriage or parents/siblings or if you want to reserve a portion from your income stream for these people, it may be worth a pre-nup. What is not worth the pre-nup trouble is money in bank/retirement/brokerage accounts and other liquid investments. These assets will likely need to be traced in any event, so best way to keep these separate is to accumulate a collection of account statements AND NOT COMMINGLE the money.
Posted on: Fri, 02 Aug 2013 21:58:11 +0000
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