The Do’s And Don'ts Of Managing Marital Property

It's difficult to see how money can ruin a marriage when passion is at its peak. However, a marriage can be put under a lot of stress when passion wanes and financial disagreements arise.

Luckily, you can spare yourself and your spouse a lot of stress by being aware of how to manage marital property. Marital property includes all possessions obtained or exchanged during a marriage. That’s any acquisition or sharing of property that occurs during a marriage, along with non-cash assets like homes, cars, and artwork; likewise, financial assets like bank accounts and stocks. This is why one of the trickiest aspects of a divorce settlement is managing marital property. 

Before starting divorce proceedings, you can limit the danger to your assets and increase your prospective settlement by defining what is and isn't marital property. So, how can you protect your assets during divorce? Here are a few do's and don'ts that may be of use.

What Should Do When Managing Marital Ownerships

Keep in mind the following points when managing marital withholdings:

1. Keep Your Assets Separate From the Onset 

If you’re considering keeping some assets apart during your marriage, you might think about working with a family lawyer to draft a prenuptial agreement, or if you're already married, a document known as a post-nuptial agreement. Prenuptial contracts specify what’s going to happen to the couple's assets in the case of a divorce or the demise of a partner. To safeguard current assets, this document specifies what withholdings will not be declared as marital property. 

Many people think prenuptial agreements are only reserved for those who have substantial assets they want to safeguard. But in fact, the majority of partners would benefit from meeting with an attorney to draft an agreement that both parties can agree upon. With such agreements, you can stop unfavorable property division arrangements during a divorce. 

A golden rule to remember: keep specific assets, such as retirement funds, home equity, or real estate, fully separate from joint or marriage property if you're worried about them.

2. Keep Precise Account Records

To prove the distinct character of property you intend to keep separate from the marital estate, keep precise and thorough accounts and records. In the case of a couple splitting up, these documents serve as evidence of the assets you brought into the union. You’ll be more likely to keep ownership if the records are as complete as possible during a divorce hearing. 

3. Purchase Property You Wish To Remain Independent With Non-Marital Assets

Purchase any additional property you want to be treated as an independent property using only your non-marital assets. Assets may be deemed marital and may undergo equitable distribution if non-marital monies are used to settle a marital debt. 

Some Of The Don’ts Of Marital Properties Management

Remember the pieces of information enumerated below to avoid any issues when managing marital properties: 

1. Never Sign a Prenuptial Or Settlement Agreement Prematurely 

Setting up accounts correctly prior to inking a prenuptial agreement is one approach to getting ready for the maintenance or division of non-marital and marital assets. Since you and your partner are almost certainly in agreement about the topic of how to share your property in the event of passing or divorce, a prenuptial or postnuptial agreement may be helpful.

2. Never Create A Joint Bank Account With Non-Marital Property

Maintaining separate accounts is crucial if you want the money for non-marital property, even if you intend to keep track of which funds belong to you and your spouse. Open joint accounts if required, using income or other shared assets that have already been decided.

3. Never Transfer Earnings Into Non-Marital Accounts

Typically, income received during a marriage is regarded as marital property. It’s possible for mixing to occur if such revenue is deposited into non-marital accounts. Therefore, any money saved while married must be maintained apart from the non-marital property because it is typically regarded as marital property.

4. Be Aware That An Asset's Augmented Worth May Qualify It As Marital Property

Be aware that the appreciation of the non-marital property, be it assets like a house or businesses owned prior to marital union, may be treated as marital property. 

Upon divorce or your passing, your spouse can be entitled to a part of the growth in value if your business or assets gained worth during the marriage as a result of your spouse's contributions. Hence, an increase in value entitles each spouse to a part of the possession. Though you can't change these active assets substantially, it's nevertheless crucial to be ready to handle any division if the need arises.

Conclusion 

In all, marital property is usually not a concern until a married couple is divorcing. Signed agreements may make the division of marital property easier for some couples if the need arises. But for others, the division of property might be challenging due to the quantity or nature of the assets involved. Therefore, obtaining legal counsel from a qualified attorney for marital property matters is advised.