No Prenup? No Problem

While prenuptial agreements can be a great tool for protecting assets in a divorce, there are ways to safeguard your money even if you do not have this signed document.  Below are several ways to protect, albeit not all of, your money, without a prenup.

• Keep Separate Funds. If you have an account that has funds in it you owned prior to the marriage or you received during the marriage or an inheritance and subsequently mixed in your earnings from your pay or joint funds from another account, the entire account becomes marital.  This is because courts consider money to be “fungible”—once the marital dollar goes in, you cannot tell which dollar is coming out.
• Separate Real Estate. If you own a home prior to getting married, be careful before throwing your spouse’s name onto the deed.  Once the non-owning spouse’s name is on the deed, the court will presume you have given half the value to that spouse as a gift.
• Use Non-marital Funds In Maintaining Non-marital Property. Use your own funds from your premarital or inherited account to maintain your non-marital property.
• Get A Valuation of Your Business.  The court is able to carve off the appreciated value of a non-marital business. Thus, if your business was worth $1 million on the date of your marriage and $2 million on the date of your divorce, your spouse could be entitled to half of the difference.

See Rebecca Zung, How to Protect Your Money If You Don’t Have A Prenup, Business Insider, May 11, 2015.