Divorce Asset Protection

If divorce asset protection is an important consideration, keep in mind that if individual property is combined with marital property, it may be considered to be marital property. In this situation, it will be subject to division on divorce.

For example, if a person has his or her pay check deposited into the same account as before the marriage took place, then any funds in the bank account may be considered marital property. The same principles apply to investment accounts.

Agreements for Divorce Asset Protection

A number of people choose to enter into a legal agreement for divorce asset protection. These agreements can be signed either prior to marriage (prenuptial agreement) or after the wedding has taken place (post-marital agreement). Either form of agreement can include provisions for such issues as:

• Division of property
• Alimony
• Support for children

In the case of a second marriage for one or both parties, entering into a prenuptial agreement may be a wise decision. If either party has children from a previous relationship (either marriage or common-law), he or she may wish to bequeath property normally considered marital property to a child or a grandchild.

Characteristics of a Valid Contract

In order for an agreement to be considered valid, the contract must meet the requirements set by each state. Generally speaking, a contract must:

• Be in writing
• Signed by both spouses
• Include a statement listing each party's assets, income, and debts
• Be entered into without duress

Each party to the contract must be given the opportunity to get independent legal advice before signing the contract. A valid contract must also include consideration. Consideration is defined as something of value given in return for the performance of another person.In the case of a marriage contract, consideration is the rights the two people would normally have under the law.

Divorce asset protection can be accomplished in different ways. Taking steps to keep individual property separate from marital property is an option in some situations. Another option is to enter into a legal agreement, either before the wedding or after the nuptials have taken place.