February 2016 - Avoid the Wedding Bell Blues
Planning and preparing for a wedding is an exciting time. However, addressing certain legal and financial practicalities before and during marriage can improve your chances of having a successful, happy union. Here are some things you should consider:
One may assume that after marriage “yours” and “mine” automatically becomes “ours,” but that isn’t necessarily the case. Marital property is defined as property each individual accumulates during the marriage with the exception of property acquired as a gift or inheritance. Therefore, couples can have both (a) non-marital property (i.e., assets acquired prior to marriage and those acquired during marriage in the form of a gift or inheritance) and (b) marital property.
If you want non-marital assets to be separate, keep them separate – keep them separate. Don’t deposit money earned during your marriage into non-marital accounts; don’t use non-marital funds to pay marital debt. This can compromise the status of non-marital assets.
Appreciation of non-marital assets (property, businesses, investments) during the marriage may be considered marital property, especially if the appreciation is active, meaning it resulted from some action on the part of the owner (i.e., managing an investment; renovating a property).
Prenuptial agreements aren’t romantic but they can address many of the above issues. Your agreement must be in writing and should contain the following to avoid being declared invalid:
Signatures of both parties, signed without duress, prior to the wedding;
Complete and accurate information;
No unconscionable terms – meaning neither party should be left with severe financial hardship while the other prospers.
Marriage requires work, but it can be worth it. My wife, Cindy, and I happily celebrated our 20th anniversary this year!As published in the February 2016 issue of the "Clinton Township Newsletter."