Some people consider prenuptial agreements to be the only way for asset protection in the event of divorce. The main purpose of a prenuptial agreement is to protect personal property obtained before marriage. Private property is not commingled with assets in divorce contract.
Parents of the engaged couple are usually those who support, and in some cases insist on a prenuptial agreement. Their general belief is that a prenuptial agreement will keep safe their family property from any claims arising out of a divorce proceeding. One of the problems is that the majority of such agreements usually remain unsigned.
State laws referring to premarital wealth vary widely. Moreover, courts may differ in opinion and have vast discretion on marital asset distribution. These are a few of the many reasons why a trust created prior to the marriage is an essential tool used by financial planners and attorneys alike in order to protect personal property rather than the array of potential pitfalls that come with relying solely on a prenuptial agreement.
In recent years trusts are gaining the leading positions in the sphere of asset protection. There are jurisdictions which give protective measures via Asset Protection trusts. Furthermore, offshore trusts can potentially provide even more reliable legal safety as long as they are drafted and implemented properly by a legal professional. Such trust companies generally also carry an insurance policy and bond. Moreover, in most cases they are not subject to the client’s domestic jurisdiction. Most importantly trusts hold their funds in seasoned international banks, which possess greater financial security.
Drawbacks of Prenuptial Agreements
– Property division prior to the wedding can cause irreparable issues between the future spouses and in some cases cause the end of marriage before it even begins.
– Prenuptial Agreements are generally drafted in favor of one party more than the other lacking equality. – Marriage contracts can create a strain on the relationship between the spouses’ respective families.
– In the case of divorce prenuptial agreements can cause unfair settlements.
– Most importantly, prenuptial Agreements generally do not protect personal assets that increase in value during the life of the marriage or assets commingled by the spouses after the marriage.
Most people try to avoid the uncomfortable conversation on the subject of family property division. Using a properly drafted trust, a person can protect his or her assets prior to the marriage without their future spouse’s involvement.
To learn more about how you can protect your assets safe in the case of divorce, please don’t hesitate to contact Morgan Legal Group PC https://www.morganlegalny.com/ to find out the most appropriate way in your individual situation.