• Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Legal Templates

Legal Templates
  • Business Forms
    Business & Contracts

    All of our legal contracts and documents are drafted and regularly updated by attorneys licensed in their respective jurisdictions, paralegals, or subject matter experts. Save your hard-earned money and time with Legal Templates.

    Top Business Forms
    Business Formation
    • Business Plan
    • LLC Operating Agreement
    • Articles of Incorporation
    • Corporate Bylaws
    • Buy-Sell Agreement
    Business Operations
    • Business Contract
    • Partnership Agreement
    • Non-Disclosure Agreement
    • Release of Liability
    • Letter of Intent
    Sales and Payments
    • Purchase Agreement
    • Sales Agreement
    • Invoice
    • Purchase Order
    • Business Purchase
    Employment and HR
    • Employment Contract
    • Employment Offer
    • Employment Verification
    • Freelance Contract
    • Non-Compete Agreement
    View All Business Forms
  • Real Estate Forms
    Real Estate

    All of our legal contracts and documents are drafted and regularly updated by attorneys licensed in their respective jurisdictions, paralegals, or subject matter experts. Save your hard-earned money and time with Legal Templates.

    Top Real Estate Forms
    Landlords
    • Lease Agreement
    • Property Management
    • Eviction Notice
    • Late Rent Notice
    • Lease Termination
    Tenants
    • Room Rental
    • Sublease Agreement
    • Roommate Agreement
    • Notice to Vacate
    • Early Lease Termination
    Home Ownership
    • Real Estate Purchase Agreement
    • Mortgage Deed
    • Quitclaim Deed
    • Deed of Trust
    • Moving Checklist
    View all Real Estate Forms
  • Personal & Family Forms
    Personal and Family

    All of our legal contracts and documents are drafted and regularly updated by attorneys licensed in their respective jurisdictions, paralegals, or subject matter experts. Save your hard-earned money and time with Legal Templates.

    Top Personal and Family Forms
    Estate Planning
    • Power of Attorney
    • Last Will & Testament
    • Living Will
    • Advance Directive
    • DNR Form
    Personal Finance
    • Bill of Sale
    • Loan Agreement
    • Purchase Agreement
    • Promissory Note
    • Sales Agreement
    Family Matters
    • Parenting Plan
    • Child Travel Consent
    • Divorce Agreement
    • Separation Agreement
    • Prenuptial Agreement
    Affidavits
    • General Affidavit
    • Gift Affidavit
    • Affidavit of Identity
    • Affidavit of Residence
    • Affidavit of Death
    View All Personal Forms
  • Support
    Resources
    • Business
    • Real Estate
    • Personal and Family
    • Financial
    • Estate Planning
    Support
    • About Us
    • Careers
    • Contact Us
    • All Legal Documents

    Monday - Friday | 9AM - 7PM EDT

    (855) 335-9779

  • Sign In
  • :email

Home Resources Personal & Family How To Protect Assets in a Divorce Without a Prenup

How To Protect Assets in a Divorce Without a Prenup

Gold Tetsola

Published December 21, 2021 | Written by Gold Tetsola

Brown Wooden House Miniature on White Surface

Prenuptial agreements, or prenups, are legal contracts that protect each spouse’s assets and financial interests if their marriage ends in divorce. Despite the legal benefits of a prenup, you may not want to get a prenup for a variety of reasons:

  • You have moral obligations or negative attitudes to a prenup
  • You want your divorce to follow the laws of the state
  • You don’t want to disclose all your assets to your spouse

There can be many more reasons why, but regardless of what they are, you may still want the security of knowing that your assets are protected in your divorce settlement. While a prenuptial agreement is an easy way of ensuring your property remains yours, there are still ways to separate your assets and keep them in your possession following the dissolution of your marriage.

Separate Your Finances

Keep your premarital accounts separate. It’s vital to safeguard your finances without a prenuptial agreement.

Legally separate your finances by having individual bank accounts or a dedicated joint account for your marriage. Courts generally consider premarital funds jointly owned when you mix them with joint assets.

For example, you might pay a home maintenance bill with money from your separate account. Regardless of how much the bill was, the account will become a marital asset.

Creditors can go after your account to pay your spouse’s financial obligations. So imagine they buy an expensive car with a loan. Your name may not be on the title, but if you contributed to the payment with your own money, you’d still be obligated to repay the debt.

Separate Your Assets

To protect assets before marriage, a spouse may want to separate them from the marital estate. The different kinds of assets a spouse may want to keep separate include:

Real Estate Property

Keep your real estate separate by ensuring that only your name is on the deed. The court may deem your real estate property as marital property if you don’t keep it completely separate. To prevent this, always use separate funds to maintain the property. Even if you didn’t list your spouse as a joint owner, they could claim an interest in it if you used marital funds to maintain it.

Inheritance 

If you get an inheritance during the marriage, it can still be non-marital property if kept entirely separate from the marital estate. If your inheritance is a significant financial sum, separation would be a case of not mixing a part of that money with your marital assets.

Gifts

A gift made directly to one spouse would be considered a non-marital asset. But suppose you receive a large sum of money as a gift. If jointly owned funds or earnings from your job are deposited into the account holding that gift, it is no longer separate property. In that case, the entirety of the gift will be subject to the property division laws of your state.

Future Assets

The value of your property can appreciate during your marriage. Whether it’s your home, income, business, retirement assets, or investment accounts, the appreciated value of the asset becomes marital property after marriage. Depending on your state, a divorcing spouse can be entitled to half of those appreciated assets, particularly if your spouse’s efforts have served to increase its value. Unless waived in a prenup, the court will consider the appreciated value as marital property when you divorce.

For example, if your separately owned business was worth $10 million on the date of your marriage, and it’s worth $20 million by the time of your divorce, your spouse would be entitled to one-half of the difference, i.e., $5 million.

Document Everything

It’s vital to have records of your finances and assets, so you can provide evidence of ownership when ready.

Consider taking a snapshot of your assets right before your marriage. The more records you keep that identify your premarital property, the better chance you’ll have of keeping your property after your divorce.

The same holds true for assets you receive during the marriage, like inheritances or gifts. These are generally deemed non-marital property with the proper documentation in place.

For real estate, a spouse may keep the property separate from the marital estate. But this is only if you can show evidence of separate ownership. You must confirm that only non-marital funds were used to pay the mortgage, property taxes, upkeep, and maintenance.

The more documentation of payments, bills, and purchases, the better. For example, a separate home that turns into a commingled marital home may be divided equally upon divorce despite the amount of personal equity you had in the original home.

Retirement accounts are another form of personal property where documentation is essential. If you can produce evidence of retirement account statements obtained before you married, the court may let you keep the premarital amount and divide the rest in a divorce. Without such documentation, the spouse you are divorcing may be entitled to half of the money in your retirement account.

Get a Postnuptial Agreement

If you’re looking for prenup alternatives, one option you can consider is a postnuptial agreement.  It’s essentially a prenup after marriage. It’s still a contractual arrangement addressing the division of assets and works well for a marriage without a prenup.

For example, if you sell your premarital home to buy one jointly with your spouse, a postnuptial agreement can establish what part of the house is owned by whom. You should be able to arrive at a fair postnuptial agreement that rewards a spouse for the equity they had already built up in the premarital asset.

Get an Irrevocable Trust

Irrevocable trusts are becoming more prevalent as an alternative to protect assets in a divorce without a prenup.

For a prenup to be enforceable, a court will consider if there was a full disclosure of assets and liabilities. The court would not deem the prenup fair and reasonable otherwise. But there can be reasons why a spouse may not feel comfortable disclosing all their assets.

A spouse may have concerns that their fiance is only after their wealth. If so, they can place some or all their assets into a trust for the benefit of their children or other chosen beneficiaries. This method would protect future inheritances for your children from a prior marriage.

When you deposit financial assets into a trust before marriage, they are protected because they would be considered property of the irrevocable trust and not part of your marital estate. Technically, you would not own the assets any longer. This is a critical distinction in a divorce.

If it turns out that you later need or want some or all the assets held by the trust, the named trustee may add you as a beneficiary.

Consult with an attorney to determine the exact details of where and how you can create your trust to provide maximum protection of your assets.

Gold Tetsola

Gold Tetsola

Personal & Family Editor

Gold Tetsola is a staff writer at LegalTemplates, his BA in English Literature & Language inspires him to navigate and simplify the complex issues of personal and family law.

Related Articles

  • The Case For the Prenup
  • 5 Ways a Prenuptial Agreement Can Divorce-Proof Your Marriage
  • Can I keep my engagement ring?
  • What Is a Separation Agreement? All You Need to Know
  • Forms You Need To File For Divorce: What You Need to Know

In This Article

  • Separate Your Finances
  • Separate Your Assets
  • Document Everything
  • Get a Postnuptial Agreement
  • Get an Irrevocable Trust

Legal Documents

  • All Legal Forms
  • Business Forms
  • Real Estate Forms
  • Personal and Family Forms

Popular Forms

  • Lease Agreements
  • Power of Attorney Forms
  • Eviction Notice
  • Living Will
  • Non-Disclosure Agreement

Resources

  • Legal Resources
  • Business
  • Real Estate
  • Personal & Family
  • Estate Planning
  • Financial
  • Covid-19 Resources

Company

  • Pricing
  • About Us
  • Careers
  • Contact Us
  • Partner With Us
  • Legal Dictionary

Users

  • Account
  • Terms of Use
  • Privacy Policy
  • Do Not Sell My Personal Information
McAfee - Together is power.
Trustpilot
BBB Accredited Business

(855) 335-9779, Monday-Friday, 9AM - 7PM EDT

Facebook Twitter LinkedIn

Copyright 2023 Legal Templates LLC. Legal Templates LLC is not a lawyer, or a law firm and does not engage in the practice of law. Legal Templates cannot and does not provide legal advice or legal representation. All information, software and services provided on the site are for informational purposes and self-help only and are not intended to be a substitute for a lawyer or professional legal advice. Use of this site is subject to our Terms of Use. Legaltemplates.net is owned and operated by Resume Technologies Limited, London with offices in London United Kingdom.”

Thank you for downloading one of our free legal templates!

Would you leave us a review?

We hope you've found what you need and are able to avoid the time, costs, and stress associated with dealing with a lawyer.

A review would mean the world to us (it only takes about 15 seconds).

Please check your download folder for MS Word or open tabs for PDF so you can access your FREE Legal Template Sample

Thanks again, and good luck!

Leave My Review