Planning for divorce while picking out wedding rings may seem oxymoronic to most Minnesota couples, but the high divorce rates mean marriages fail despite the best of intentions. Carrying health or life insurance is not considered cynical or bad luck, and thinking about worst-case scenarios on the front end of marriage is simply part of cautious financial planning.
While prenuptial agreements are the gold standard for divorce planning, they are far from the only approach to asset protection. Postnuptial agreements have increased in popularity and are similar to prenuptials legally, but they are executed by the parties after a marriage. Such agreements allow the parties to set aside worry about what a divorce court may rule and let them focus on their relationship. Another useful strategy is simply maintaining separate assets and accounts. Having separate accounts can partially protect one party from the other person’s creditors if debt collection is an issue. Many couples have joint accounts for marital bills and keep their own individual accounts as well. Discipline is important, and any comingling of assets whatsoever can lead to them being considered joint marital assets.
Prudent estate planning can involve keeping property separate as well. If one party brings real property into the marriage, he or she should think twice before adding his or her spouse’s name to the deed. In the event of an untimely death, the surviving spouse could end up in an unwanted partnership with the heirs of the deceased. Keeping good records is an important aspect of asset management. Each party should have a detailed accounting of the assets he or she brought into the marriage with valuations on the wedding date. Simply saving investment account statements or getting property appraised prior to marriage can save headaches later if things fail to work out as planned.
Asset management for divorce considerations can be complicated. Best practices depend on individual circumstances, so consulting a qualified family law attorney is a worthwhile approach as early as possible in the process.