Your planning to get married soon!
Many thoughts are running through your mind getting ready for the big day. One nagging question that might arise is what if I need a plan B exit. How do I proceed – prenup agreement?
During marital bliss moments it can be difficult to sort out contingent exit plan. How do you get married and remain financially safe. The standard method is to for both of you to disclose all with an attorney to write up a prenup agreement, the divorce plan.
Some find this task all okay. Others find it distasteful. It can be a sensitive topic. Money habits can take time to reveal themselves.
First you need to have ‘that’ conversation with your fiancé. This is often the most difficult part of the process. Others are quite comfortable having this conversation about money, assets, and credit.
Secondly, both of you list a full inventory of assets and liabilities. These are given to the attorney who will draft up the contract. You and your fiancé agree upon a divorce plan recognizing that a fair percentage of marriages terminate sooner than you envisioned.
Third is that both parties need to be aware that a prenup agreement can be contested in court. No matter how strong or clear the agreement, either of you can hire an attorney who will challenge it on some basis.
If you both decide to get a prenup then jointly choose the lawyer to help draft the paperwork. Think of it as an opportunity to discuss important goals. Both parties ‘get’ heard. It will help you both realize how financial affairs will change.
Your Quiet Alternative
Rather than a prenup agreement, quietly retitle your personal assets to a private trust. You’re in control. You never need disclose the trust exists. You must do this prior to the wedding day. Trust assets properly managed are never part of community property.
For clarification purposes – this private trust is also known as a business trust. Separately, you might also have a living trust.
Imagine the relief of knowing you avoided this assets & liabilities questionnaire with your fiancé. However, it remains wise for the health and well being of your marriage to discuss credit scores and approach to money with each other.
A trust also eliminates any potential ‘step-parent’ interference with children. If you have a college education fund or medical expenses they remain under your control. You don’t need any more family conflicts. Keep it clean, use the trust to carry out your plans without interference.
This trust also keeps your sole property separate from joint property. It keeps these assets safe from any misfortune or future liability of your spouse. Preplanning asset safety before marriage is actually smart for both you and your spouse.
Over time as the marriage matures you can explore bringing trust assets into a money conversation. Meanwhile the trust keeps you in control of how little or how much to disclose.
Some people might consider using a Corporation or LLC to hold premarital assets. But here’s your problem – they’re easily found on google by anyone including divorce attorneys. The solution is a private trust because its invisible on google to everyone. This enables you to keep assets quiet until you’re good and ready.
A prenup trust is your better solution to isolate premarital assets. It’s quiet, low maintenance and very low profile. You’ll look back knowing this was the smart way to go.