Getting married can be the most exciting time in a person’s life: planning the wedding, going on the honeymoon, and building a life together. However, getting married also carries some uncertainty about what the future will hold. Specifically, how are you protected financially and what will happen to your assets should the marriage end? In Indiana, all assets are considered joint marital assets upon divorce. Here are some things to consider when it comes to protecting your personal assets in marriage.
Prenuptial agreements, or “prenups”, carry a bad reputation because people view them as a spouse anticipating divorce. However, prenups provide guidance for distribution of assets in the event a marriage ends, either by divorce or by death. Spouses can include provisions about the contents of their will in a prenup, and they can include provisions specifically identifying property to be distributed upon a spouse’s death. Additionally, there are special circumstances in which having a prenuptial agreement can protect assets for inheritance purposes. If you have children from a previous marriage or partner, you may utilize a prenup to ensure those children inherit your assets as you desire by excluding those assets from the marital pot.
Prenuptial agreements can also cover a spouse’s right to rent, sell, or buy property, whether insurance policies will be payable and to whom, which state law will govern any potential disputes, whether alimony will be given to a spouse, and whether the spouses should take certain actions in estate planning. Indiana law has enacted the Uniform Prenuptial Agreement Act (“UPAA”) to determine the enforceability of prenuptial agreements, which requires that all prenups to be in writing and signed by both parties. Prenups are a contract between future spouses in which each spouse can and should negotiate the terms to reach an agreement that benefits each of them individually.
While prenups can protect children and assets, they can also cause a sense of distrust which can be a poor way to start a marriage. Furthermore, prenups do not guarantee absolute protection. Spouses may exclude or lie about certain assets in the prenup, or it may not be enforceable under a technicality such as lacking essential terms in writing. If you are getting married soon and think you might benefit from a prenuptial agreement, it is important to have a conversation with your partner about the advantages and disadvantages of having one in place.
Because prenuptial agreements can be perceived as a lack of commitment, a couple may instead consider a postnuptial agreement (or “postnup”). Postnuptial agreements are very similar to prenups but are created and finalized after a couple is married. Postnups are a great option if a couple is hesitant to get a prenup or does not have many assets they need to protect before the marriage. Once married, a spouse may experience a significant change in assets such as receiving an inheritance, and they may want to create a postnup to protect any new assets in case the marriage dissolves. However, even postnuptial agreements are not without fault. Postnups can still offer a sense of distrust in the marriage and are subject to enforceability requirements.
Obtaining a prenuptial or postnuptial agreement is a personal decision that should be made between you and your spouse. Call us at (317) 825-5110 to speak with one of our experienced Family Law attorneys to determine if a prenuptial or postnuptial agreement is right for you.
For general information regarding divorce in Indiana, please visit our website at https://www.mcneelylaw.com/newsroom/divorce-in-indiana.
This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion of any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.