More than 50% of American marriages end in divorce. That is a sad fact. Sadder still is the fact that in many states, the wealthier spouse can be left with dramatically reduced assets after the divorce details are all ironed out. States like California for instance, have laws that greatly favor the spouse with fewer assets.
Asset Protection Planning Before Marriage
Obviously, it makes great sense to walk into a marriage knowing that your wealth is protected, and that any divorce down the line will not leave you greatly impacted financially. One way to do that is by getting your to-be spouse to sign a prenuptial agreement. Unfortunately, there are a lot of negative connotations that the words “prenuptial agreement” bring up. Your fiancée is very likely to be offended, and in fact, we often notice that this is one of the reasons why people put off the idea of having a pre-nup in the first place.
For people like this, and depending on the size of the assets, we would suggest an asset protection plan instead. A domestic or foreign asset protection trust is becoming more popular as a means of preserving wealth in the event of a divorce, as long as it is done BEFORE the marriage. Not everyone will benefit from having an offshore asset protection trust, compared to a prenuptial agreement. When the assets in question are smaller in comparison to the cost of establishing and maintaining an offshore trust, your attorney will likely not promote the idea of a trust.
However, if you’re getting married soon, are doing very well financially and are worried that your fiancée would be put off by talk of a prenuptial agreement, speak with an experienced asset protection attorney, and evaluate your options. You might just be able to protect your assets without having to initiate that uncomfortable pre-nup conversation.
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