In Ohio, a spouse’s separate property remains that person’s separate property, regardless of the length of the marriage, as long as the spouse claiming the separate interest can trace the asset and prove that it is not marital. In our practice, we often see clients who came into their marriage with assets, but don’t have the documentation to prove it. Banks and other financial institutions are only required to store records for a period of seven years, so if you don’t take steps to document your pre-marital assets prior to your marriage, you may not have the opportunity to do so down the road. A prenuptial agreement will clearly define what assets each spouse owns at the beginning of the marriage, and can lay out exactly how each asset will be treated in the event of divorce. A prenuptial agreement can also provide for support after a divorce.
In addition to defining many of the parties’ rights in divorce, a prenuptial agreement can also define how assets will be allocated in the event of one spouse’s death. This is particularly important for individuals who have children from another relationship. Without proper estate and prenuptial planning, a large portion of your assets may end up being distributed to your new spouse, who has no financial obligation to provide for your children from a prior marriage after your death.
In some cases, a couple may assume that there simply aren’t enough assets going into a marriage to warrant the necessity of a prenuptial agreement. “Prenups” are usually discussed in the media in relation to celebrity divorces. Whether it’s Jessica Simpson lamenting her decision to forego a prenup prior to her marriage to Nick Lachey, or Jessica Biel’s and Catherine Zeta Jones’ rumored prenuptial clauses charging sky-high penalties for their spouses’ infidelity, it may seem that prenuptial agreements are only intended for the rich and famous. This is a common misconception. You don’t have to have a celebrity-sized bank account to benefit from a prenuptial agreement. According to the U.S. Census Bureau, the median age at which people are first married has increased steadily since the 1950s, from age 23 for men and 20 for women in 1950, to age 29 for men and 27 for women in 2015. These days, most people getting married for the first time have been participating in the work force for several years. Many people will enter into marriage for the first time already having assets, such as employer-sponsored retirement plans or even real estate. No matter how small the balance in those retirement accounts may seem to you today, or how high the mortgage balance may be on that starter house you purchased before meeting your fiancée, it is worth your time now to record the value and existence of those assets as your premarital interest in those items may appreciate as time goes on. It will be much harder in the future to try to prove the value of these items at the time of your marriage if you haven’t recorded it today in the form of a prenuptial agreement.
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Sources:
-“Why did Jessica Simpson say her Marriage to Nick Lachey was her ‘Biggest Money Mistake’?,” by Emily Yahr, published by The Washington Post, September 10, 2015, https://www.washingtonpost.com/news/arts-and-entertainment/wp/2015/09/10/why-did-jessica-simpson-say-her-marriage-to-nick-lachey-was-her-biggest-money-mistake/
-“Lifestyle prenups, like the deal between Jessica Biel and Justin Timberlake, are a hot trend,” by Linda Marsh, published by the New York Daily News, June 4, 2013, http://www.nydailynews.com/life-style/deal-violation-part-lifestyle-prenups-article-1.1361889
-U.S. Census Bureau Median Age at First Marriage: 1890 to present, https://www.census.gov/hhes/families/files/graphics/MS-2.pdf
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