Updated: Oct 3, 2019
Prenuptials! If you are a business owner, receive income from your separate property such as a trust or annuity, or have children from a prior marriage, you need to protect those assets. A prenup protects you from not only dividing the assets but also may waive or establish limits to alimony. For example, if you double your business during the marriage, you may have to pay your spouse half of the active increase in its value. If you have an annuity or trust that provides regular income, your spouse could take part of it as alimony because the income increased the marital standard of living, i.e. larger home, vacations, etc. If you have children from a prior marriage, a prenup will establish expectations in the event of your death or divorce to protect your children’s inheritance. What is one person is moving into the other person’s home? If the marriage does not work out or dies, how does the move out process work? A prenup is a contract that is agreed upon prior to the marriage and establishes the terms of many of these things, taking them off the table for discussion later.
Changing your will and beneficiaries is also important so that large purchases, bank accounts, income and guardians for the children are identified. Your healthcare power of attorney also typically needs to be updated to include, at a minimum, your spouse’s access to medical information in the event you are unable to make medical decisions.
What are some issues we need to be aware of going into a second marriage?
As people accumulate wealth, it is important to understand the expectations of the intended spouse, especially with finances. What will happen to assets, debts and income in the event of death, medical issues, with children and with separate assets. A second marriage can be compared to creating a business partnership as far as income and property is concerned. Being open and honest about finances will make joining finances a smoother process.
Co-mingling assets that existed prior to the marriage should be avoided in order to protect inheritances and later distributions from divorce.
Maintain statements showing your account balances at the date of marriage so that you can prove the value of assets in the event of death or divorce. This includes things such as your bank and investment balances, mortgage balance, and the appraised value of property.
By Mary Gurganus of Triangle Divorce Lawyers