Some Financial Considerations You Probably Should Consider
I congratulate you and wish you all the best. However, I do want to provide you some important statistical information and advise you to consider protecting your assets just in case sometime in the future your remarriage turns out not to be what you or your future spouse had hoped for.
Did you know that 50 percent of all first marriages end in divorce? That percentage soars to 67 percent for second marriages and rises to 72 percent for third marriages. For this reason, I urge you to bear in mind the following information.
Subsequent marriages often occur after one or both parties have accumulated significant assets. They do not expect their marriage to end in divorce but have enough life experiences to know this could happen. They want to keep their assets separate in case the subsequent marriage fails.
This is especially true if you have children from an earlier marriage or marriages and want to preserve your separate property for your children to inherit. There are ways you can achieve this and do so in a non-adversarial way.
One of the best ways to clearly keep previously accumulated property — like real estate, bank accounts, retirement and investment accounts, and stocks and bonds — separate is to have a qualified attorney prepare a premarital (or pre-nuptial) agreement.
Your agreement needs to meet certain legal requirements to be valid. For example, your agreement must:
- Be in writing and signed by both parties.
- Be prepared well in advance of the marriage to avoid claims that it was signed under duress.
- Include consideration.
- Not be unconscionable at the time of the divorce.
Both parties should be represented by counsel, and the agreement should have a severance clause that makes other terms still applicable if one term of the agreement is determined to be invalid.
The collaborative process, a non-adversarial approach, works well with couples who need guidance in creating a prenuptial agreement with which they are both happy.
A Forensic Accountant Will Help You Preserve Your Separate Property
Another way to keep separate property separate is for you to consult with a forensic accountant experienced in marital dissolution issues who will advise you to not add your new spouse’s name to any of your accounts or properties, and to set up all new accounts for the marriage and put your earnings from your working efforts into those new accounts.
Only the assets that you accumulate during your marriage from your working efforts are community assets. You should not commingle your separate property with community property. Keep in mind that if you take a vacation using money from your separate property, you will not be reimbursed for that money if you get divorced.
If you are planning a second or third marriage and have separate property assets that you want to protect if you go through another divorce, you need the help of a forensic accountant who is experienced in assisting attorneys preparing prenuptial agreements with asset disclosures.
Contact the professional team at the offices of Ron J. Anfuso, CPA/ABV, An Accountancy Corporation. You may also call us at (310) 378-6606 for a free telephone consultation.