If you’re getting remarried, the best way to protect your property and make sure it stays separate is through a prenuptial agreement, point, blank, period. A prenuptial agreement provides the highest level of protection available (legally) to your stuff. Without it, sure, you still might be able to salvage your separate property in a divorce, but it’s not guaranteed. And is that really worth the risk? If you’re a daredevil and willing to take on that chance, there may be some strategies you can use to attempt to keep your property separate, but again, you’re gambling at that point. So, without further ado, keep reading to find out what you can do to keep your property separate in a divorce.
What do we mean by “separate property”?
The concept of separate property is an essential component to understand in family law, especially when navigating a prenup. The exact definition of what constitutes separate property can differ across states. Generally, “separate property” refers to the property that is owned by only one person and is not divisible in a divorce. Often times, states consider separate property to include assets acquired prior to marriage and acquired through an inheritance or gift from a third-party. Some states will consider what is separate based on the length of marriage, or whether the couple has children. In contrast, assets categorized in a divorce as “community property” or “marital property” are treated differently from separate property. These assets are usually acquired during the marriage and are viewed as the joint property of both spouses and are subject to division in the divorce.
Note that property division during a divorce isn’t always clear-cut. In many states, courts possess the discretion to evaluate the entirety of a couple’s property, regardless of when or how it was acquired. This emphasizes the need for a prenup to ensure you decide what should be yours alone, and what should be subject to a potential future division!
How to keep property separate when remarrying
Without a prenup, there’s no ironclad way that you can keep your property separate. We do not recommend trying to do this without a prenup, as there are exceptions and nuances to the law that can apply and change the categorization of your property from separate to joint. However, here are some strategies you might consider when remarrying:
Maintaining separate accounts
With or without a prenuptial agreement, spouses who want to protect separate property should keep separate property in separate accounts. When you begin mixing your individual money with joint funds, you are entering the realm of commingling. This commingling might seem harmless initially, and you may think you can even simply remove the funds at a later date with no consequences, but that may not be the case. In the unfortunate event of a divorce or separation, delineating which funds belonged to whom can become a maze that even a court might struggle to untangle. If you ever end up facing a divorce or separation, having a blur of combined assets can make the process even more challenging and emotionally draining. You might find yourself grappling to identify and reclaim what you once knew was unmistakably yours.
By maintaining separate bank accounts for personal assets, not only do you retain clarity, but you also preserve individual financial autonomy. It becomes easier to manage personal expenses, track individual savings goals, and ensure that any inheritance or gifts remain distinctly separate. Furthermore, in the broader picture, keeping finances clear can lead to fewer misunderstandings and potential disputes down the line.
Documenting and organizing separate property
Before saying “I do,” many folks have accumulated assets, both big and small, that hold financial or sentimental value. This could range from hard-earned savings, properties, or family heirlooms, to perhaps even unique items like vintage collections or a car that’s been a personal restoration project for years.
To ensure these treasures remain clear and unambiguous, documentation is helpful. Think of this process as crafting a detailed personal inventory: methodically listing each item, then supplementing that list with tangible proofs of ownership. This could be in the form of receipts, property deeds, or inheritance letters. This detailed record not only serves as a protective measure but also fosters transparency between partners, laying a foundation of trust. These receipts can be attached to the back of your financial schedule in your prenup, along with account statements, etc. While this might seem like a lot to take in, remember that starting your marital journey with such a clear understanding and mutual respect for personal assets can only bolster the foundation of trust and partnership in the years to come.
Avoid contributions to separate property
In many states, if one spouse contributes to the other’s separate property, whether it be monetarily or in sweat equity (say helping to physically remodel your home), then they may be entitled to some portion of it. This depends on your state laws and your specific circumstances, but it is possible to lose some of your separate property due to spousal contributions. If you want to ensure your separate property remains separate, do not allow your spouse to contribute to your property, whether financially or non-financially. Again, this is not foolproof, but it is one way to protect yourself outside of a prenuptial agreement.
Clear communication and transparency
While this isn’t necessarily a legal way of doing things, it can be a personal way to set expectations with your spouse and potentially reduce the likelihood of future conflict. Make sure to communicate to them exactly what you want to keep separate. For example, let’s say you own a home prior to marriage that you expect to keep as your separate property. Your partner, on the other hand, believes you would want to share that in a divorce, since she helped you pick out all of the designs for it. Well, this could one day end in a big misunderstanding…in the courtroom. It’s better to set the expectation ahead of time. Now, the best way to set the expectation is through a prenup and to put it all in writing.
Inheritance and estate planning
If you have children from a previous relationship or wish to ensure that your separate property is passed down to specific individuals, estate planning becomes crucial here. If you don’t have an estate plan in place, then the intestate laws of your state will determine who gets what when you die. This is different in every state, but the spouse usually gets a big chunk of your money.
If you want to keep separate property separate, even in death, you should consider consulting an estate planning attorney to create a will, an elective share waiver, establish trusts, or explore other legal instruments that align with your intentions and protect your separate property. Keep in mind that prenups can be a great tool in making sure separate property stays separate in death, and that is through the spouse waiving their rights to any of your separate property in the prenup itself.
Child support and alimony considerations
Don’t forget about child support and alimony. While this article mainly focused on the actual assets you own and the division of such, it’s also important to think about child support and alimony in a divorce because it can dig into your assets. Alimony and child support are determined by a court, and there’s no way to avoid that. There’s no secret trick you can utilize to avoid paying alimony or child support. However, with a prenup, you can waive alimony (but not child support). This is really the only way to attempt to keep alimony out of the equation in the event of a divorce.
Frequently Asked Questions (FAQs) about keeping property separate when remarrying
Q: Can I protect my separate property without a prenup?
A: You can try, but it’s not as ironclad as getting a valid and enforceable prenup would be. If you want to have the highest level of protection for your separate property, get a prenup.
Q: What if my spouse contributes to my separate property during the marriage?
A: If your spouse contributes to your separate property, they may be entitled to a portion of it in a divorce. This depends on your specific circumstances and the state law applied.
Q: What happens if I remarry without taking any steps to protect my separate property?
A: Without any measures in place to protect your separate property, it may be subject to division during divorce or in death.
Q: Are prenuptial agreements the only way to safeguard separate property?
A: Prenups are the highest level of protection you can give to yourself if you want to keep your separate property separate.
The bottom line on keeping property separate when remarrying
The bottom line is we do not recommend getting remarried without a prenup. Theoretically, it is possible to skip the prenup and still keep your separate property intact, but why risk it? When a prenup is only $599, and you stand to lose up to half or more of your separate assets, is it worth the risk? Plus, 83% of HelloPrenup users say they felt closer together after getting their prenuptial agreement. It’s a win-win. Happy planning!
Nicole Sheehey is the Head of Legal Content at HelloPrenup, and an Illinois licensed attorney. She has a wealth of knowledge and experience when it comes to prenuptial agreements. Nicole has Juris Doctor from John Marshall Law School. She has a deep understanding of the legal and financial implications of prenuptial agreements, and enjoys writing and collaborating with other attorneys on the nuances of the law. Nicole is passionate about helping couples locate the information they need when it comes to prenuptial agreements. You can reach Nicole here: Nicole@Helloprenup.com
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