When couples in Ohio get married, they might have concerns regarding the property and assets they bring into the marriage as well as those accumulated throughout the duration of the marriage. While many couples do not like to consider the possibility of splitting or divorcing, it is a reality that couples could face before and during their union. Drafting a prenuptial agreement or a postnuptial agreement could help protect nonmarital assets.
How can prenuptial agreements help with asset protection? In traditional prenuptial agreements, full and accurate financial information is required. Failure to do so could result in the document becoming unenforceable or only partially enforceable. Due to this shortcoming, a stealthier element has been added to better protect nonmarital assets.
What is a stealthy prenuptial agreement? It is a carefully organized document that could include the combination of three legal entities: a management company, a family limited liability company and an international asset protection trust. Because these structures have been put in place prior to the union, there are no disclosure obligations. Due to this element, this is often an ideal approach for a high-asset union or wealthy couple.
An option that some couples should consider if they do not want to include a prenuptial agreement in a marriage is devising a trust. A trust is one way to protect separate property and personal assets from property division in the event of a divorce. By holding nonmarital property in trusts, the beneficiary has control of their distribution if it is determined by the court that distribution is mandatory.
Safeguarding protection of nonmarital property and assets of an individual is often an important step to consider and complete. For this reasons, couples intending to marry or those currently married should consider their options regarding asset protection. This could help them avoid future disputes and post-divorce issues.
Source: The New York Times, “A Stealthy Prenup Can Help Protect Assets,” Thomas J. Handler, March 21, 2013