Financial planning in case of a divorce

While no one likes to think about divorce, California couples should consider ways to protect their finances before tying the knot. Some people might feel that preparations such as prenuptial agreements indicate a cynical approach to marriage. However, future spouses may look at it as akin to wearing a seat belt even though they don’t expect to be an accident.

Couples who are already married can create a postnuptial agreement, which is similar to a prenup. They might also want to consider creating separate accounts even if they also have joint accounts. They should keep financial documents, including records of inheritances. Unless the spouse wants to mingle inheritances with marital finances, it’s important to keep them in separate accounts.

Spouses should also maintain separate property by keeping related funds in an individual account rather than a joint account. Otherwise, that property might be considered joint.

These precautions may be particularly important in California, a community property state. Most assets and debts acquired after marriage are considered marital property in community property states. In a divorce, these assets are supposed to be divided equally unless there is a prenuptial or postnuptial agreement. However, it’s important to note that some marital agreements can be challenged. Even if a couple does not have an agreement, they still might be able to negotiate property division without having to go to court. They might be more satisfied with the outcome if they are able to collaborate on a solution since there may be no recourse if they are unhappy with a judge’s decision.

2019-10-01T13:12:37+00:00Tuesday, March 6, 2018|Divorce|