One thing that has been growing in popularity among married couples in today’s world is maintaining separate finances. A Bank of America survey suggests that over a fourth (28 percent) of millennials go this route after they wed.
Keeping separate bank accounts and similar strategies can have many possible benefits. They can be helpful in money management, reducing the potential for financial conflicts and giving a spouse an important safety valve in the event of a crisis situation. However, it is important for couples to be aware of a significant limitation of these strategies.
Some might assume that if they keep money they earn in a different account than their spouse, these assets will be protected in the event of a divorce. However, this generally is not the case. There are many ways that money in a separate account could be deemed subject to division in a divorce.
So, if a person is relying on maintaining separate finances as a way to protect his or her property, he or she could be in for an unwelcome surprise should a divorce occur.
Now, there are strategies out there that soon-to-married individuals can pursue if asset protection is an important goal for them. One is to form a prenuptial agreement. Such documents can set a framework for how assets will be divided should a divorce happen, and thus can be used to provide protection to important property.
When it comes to these agreements, getting the details right is important. Mistakes in their terms or in creating them could cause such contracts to be invalid or to not serve their intended purposes. So, skilled legal guidance can be a very important thing for individuals to seek out when considering forming a prenuptial agreement to help with asset protection.