Marital agreements manage the division of property between two spouses. Often, they are made in case of separation or divorce, though they can also help with normal estate planning for when one spouse passes on. These agreements have tax implications, so involving legal assistance in drafting them is vital. In addition, an attorney can help you plan how you will handle taxes and other legal matters after drafting the document.
There are two primary types of marital agreements: postnuptial and prenuptial.
A postnuptial agreement is one entered into by both spouses after getting married. Often, they are made at the time of divorce, though that is not always the case. These allow for a specific division of property should the marriage end or if one spouse should pass away. Ultimately, the purpose is to give each party a clear understanding of their financial rights and responsibilities.
A couple types of postnuptial agreements include:
Transmutation agreements: In a transmutation agreement, property is changed from separate to community and vice versa. In other words, what was once considered to be property owned by one of the individuals in the marital relationship then becomes shared between the two (or the other way around).
Marital settlement agreements: These give the terms of a divorce, including defining the relationship between separated spouses, the division of property, child custody, and so forth.
Structuring and drafting these agreements requires that both parties provide full disclosure of their assets. Also, legal assistance will allow you to make sure they are properly drafted and fully enforceable. Hart & David can make sure your assets are protected in the event of separation, death, or other circumstances.
A prenuptial, or premarital, agreement is one entered into prior to getting married. Its purpose is to protect the assets of each individual and to make sure financial responsibilities and privileges are properly understood prior to entering into a marriage. This is far more reliable than figuring out how to divide everything during an emotionally charged divorce.
These agreements can often serve to protect the assets of one individual if he or she owns significantly more than the other. From there, taxes and other matters can be handled with full understanding of who is responsible for what throughout the marriage relationship. It also prevents the massive shift of assets from one spouse to another in the event that the marriage ends abruptly.
Legal Help in Marital Agreements
Hart & David helps our private clients with estate planning and asset protection through structuring marital agreements. This can help you in a variety of ways, including:
– Protecting children by outlining custody and financial responsibilities
– Reducing uncertainty
– Lowering expenses incurred by divorce or separation
– Protecting family assets and preventing windfall
– Ensuring support of spouses and children
To be valid, most marital agreements must incorporate the following elements:
– All assets must be disclosed
– No fraudulent transfer of assets/property is involved
– Agreement must be made voluntarily
– Agreement is made in writing to facilitate enforcement
For assistance with drafting marital agreements or representation during a dispute, contact the attorneys at Hart & David for a free consultation.