What Will Happen To Your Asset If You Don’t Have A Prenuptial Agreement In Case Of A Divorce
Having a prenuptial agreement can help you avoid a lot of confusion in the event of a divorce. Family law attorney and co-author of The New Love Deal: Everything You Must Know Before Marrying, Moving In, or Moving On Gemma B. Allen explained that this deal could provide an “overall comprehensive approach” as to how to treat assets and liabilities. It could also protect the desired asset or family interest and avoid being exposed to social media.
She said that a prenuptial agreement is a flexible tool that could do whatever goals the couple wanted to reach when it comes to their financial futures. It would let them have control over their future and take them out of the “discretionary power of the court system.”
However, if you don’t have a prenuptial agreement, your assets’ future, in the event of a divorce, will be handled by the state and the court. So, here is what going to happen.
According to Allen, where you live plays an important role in case of a divorce. The states have some “very serious, and some only subtle differences in their laws and how these factors interplay.” However, these differences can affect your future when you call your lawyer to get a divorce.
The state can divide your assets into two ways.
The first one, which is mostly used by most states, is called “equitable property” or “dissolution.” Here, Allen explained that only the marital assets could be divided on an “equitable basis.” The non-marital assets, on the other hand, or the things you had before you got married and managed to keep separate, would be yours alone.
The second one is “community property.” This thing gets a lot of press, even though it only applies in eight states, California included, where high-profile celebrities often opt for divorce.
In these states, the judges will have no discretion against the joint assets. Hence, they will simply divide them in half. However, your attorney should need to know that the inherited and premarital assets will remain the separate property of the real owner.
In the court, your assets include everything you own – from the grandest things like properties, investments, and businesses to the simplest stuff like your bed, lamp, etc. So, when classifying your assets, things can get very tricky.
If all your assets are real estates, you have to note who sells what, when it is sold, and at what price. If it is a business, you have to provide the answers to the questions, like you as the owner, how can you afford to buy out your spouse, and what terms should be set.
If it involves stocks, it can arise too many problems of market conditions and capital gains. Your former marital home, too, will impose issues because of money and, believe it or not, memories.
If this sounds a little a messy, sure it is. Allen said that like beauty, equity is in the eye of the beholder. And sorry, your lawyer cannot do anything about it as the judge has the discretion as to whether to divide your marital assets 50/50 or one of you should receive more or less due to health, age, earning abilities, and several other reasons.
Also, Allen noted that no matter what state proceedings are, the court holds the discretion over alimony, or most commonly known now as spousal support or maintenance, and child support. Along with these things, the court will also divide your debts, whether you like it or not.