Prenuptial agreements are on the rise in the United States. Not only do they provide financial peace of mind for married couples, they provide comfort for those whose marriages don’t last. According to the Bureau of Labor Statistics, nearly half of all marriages end in divorce. Before you even say “I do,” you have a 50% chance of needing a prenup.
Prenups allow you to enter assets and finances into a legally-binding agreement which then guarantees fair distribution of assets following a divorce. However, concern has been increasing over the past 10 years that divorce judges have too much discretion in divvying up property and assets, even when a prenup has been signed. In addition to judiciary edict, prenups can be declared invalid at the time of divorce for a variety of reasons, making them completely useless.
Trust in Extra Protection
For many couples, it is imperative to keep finances, inheritances, and pre-marriage property separate from assets that can be distributed during a divorce. Therefore, to back up prenuptial agreements, many couples have enlisted lawyers to help them set up premarital trusts. These trusts can be used to help shield assets acquired before a marriage from being unfairly divided.
Trusts act as holding markers for one spouse’s wealth and assets by allowing a second party to hold (and in some cases invest) property and finances on their behalf. Since the assets are “trusted” to someone else, they’re not considered part of marital assets.
The Wall Street Journal states that setting up a trust in addition to a prenup can have many benefits. These include:
- Shielding premarital assets or inheritances from spouses
- Not requiring the future spouse's consent
- Providing extra comfort to extended families by ensuring family wealth stays intact
Trust or No Trust? You Decide
Given the high potential for divorce, do you think prenuptial agreements and premarital trusts are essential for a secure marriage? Would you rather just take your chances that you won’t need financial protection?
Let us know your thoughts by leaving your opinions and questions in the comment section. You will help us learn more about societal opinions and your experiences could help our clients get the extra knowledge, reassurance, and support they need during a painful divorce.
Need more information on prenups, trusts, or divorce? Contact us today for a free consultation. We’ll be happy to walk you through how to secure your financial future. Call now for an appointment.