You want to share your life with this person, but
do you have to share their debts, too?
Some lawyers insist that debt brought into a marriage
remains the property of the debtor. Others argue that judges, in
a divorce, will look at all the obligations facing both parties
and split things accordingly.
Do you have a business that you want to keep for yourself
and your kids? Consider a family limited partnership, a device used
by giants like Nordstrom.
"It's an effective way to keep people
out," Miller says. You're saying, in effect, "they will
get no part of it once the sheets split."
And remember, rights to certain assets,
such as retirement plans, can only be legally waived
after the wedding. So if you have those arrangements
in your prenup, you need one more trip to the attorney's
office after you say, "I do."
In the state where you live
Also remember that where you live might make a big difference in
how you live if you should get divorced.
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Community property states |
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Arizona |
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New Mexico |
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California |
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Texas |
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Idaho |
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Washington |
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Louisiana |
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Wisconsin |
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Nevada |
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In a community property state, assets acquired during
the marriage are owned 50/50. In an equitable distribution state,
the judge tries to divide the assets according to the needs of each
party.
"People move and have no clue
that state law has possibly upended every financial
decision they have made in their lives," Engel
says.
While you can put anything you want into a prenup,
to be enforceable a court must find that it is fair and honest.
That means each party has to get something and neither party can
hide anything.
Prenups can also be set aside if life circumstances
change dramatically -- so your first draft of the prenup might not
be your last. Children, wealth, debt and careers change marriages
-- and marital finances. You may want to revisit, or even invalidate
your prenup later in life.
"You have to understand that
marriage is a business relationship, as well as
a marriage and family relationship," says Tina
Tessina, a psychotherapist and the author of "The
Ten Smartest Decisions A Woman Can Make After Forty."
"A good marriage will take in money, spend out
money and turn a profit in terms of savings and retirement, she
says. "Your business skills can translate into a romantic relationship
if you let them."
Dana Dratch is a freelance writer
living in Atlanta.
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