Since the U.S. Supreme Court’s recent ruling on same-sex marriage, there is an influx of same sex-couples rushing to get married. But couples should be warned, before running down the aisle, it’s important to first do some planning.
Planning is especially important if you have been together for a long period of time or if you individually have a large number of assets that need to be protected.
This pre-marriage planning will help protect your individual assets in the event of divorce, incapacity or death. There are a few ways to accomplish this:
Premarital Agreement (“Prenup”)
A premarital agreement is most commonly used to characterize assets and debts during the marriage and divide property in the event of divorce. It can also be used for the following:
- Determining the responsibility for premarital debts
- Defining the ownership of the marital home
- Estate Planning and distribution of property after death
- Deciding which items are community property and which are separate property
- The resolution of future financial disputes
- Spousal support (alimony) obligations
- Support of existing children
- Allocation of taxes
- Protection of business interests
If you are already married, there is another way to protect your assets. A postmarital agreement is similar to a prenup, the only difference it that it’s written, agreed to, and signed after you’re married. Within your postmarital agreement, you can make community property or debts into separate property with a partition or exchange agreement and you can also transform separate property or debts into community property with a conversion agreement.
In addition to discussing and considering premarital and postmarital agreements, it is also very important to consider an estate plan. If anything happens to you and you become incapacitated, or die, you want to make sure your assets go exactly as you direct and not to Uncle Sam or a 3rd party creditor. In order to ensure this, you must speak to a qualified estate planning attorney.
It is always important to put pen to paper so you know what your estate consists of, which your attorney can help you with. Once that is complete, your Will and Trust attorney will be able to recommend which estate planning vehicle will obtain your goals and objectives, including but not limited to reducing your estate tax and providing asset protection for your loved ones.
As you can see, there's a lot to consider before tying the knot. Planning ahead will not only protect your assets, but it can save you time, money and stress in the future!