California couples headed for the altar may think divorce planning is bad luck, but putting structures in place to protect finances in the event of a marital breakup can also protect them in other ways. Between added protections to protect against unexpected contingencies and the simple truth that a large percentage of marriages end in divorce, it pays to plan for the worst while working toward the best in romance.
Maintaining separate assets is prudent for married couples. Even without divorce, creditors can come after joint accounts if one spouse has unpaid debts subject to collection. Estate planning can also be made easier if some assets are kept apart. In the event of a death, a spouse may trust his or her partner to take care of the kids, but can the partner’s next spouse, who may end up with joint assets, may not have the same financial priorities. Couples are advised to have both individual and joint accounts, which are dedicated to specific purposes. Joint assets should be provided for from a joint account.
It is wise for couples to be very careful with real estate in particular. Adding the name of a spouse to a deed could result in becoming partners with his or her heirs after an unexpected death. If separately owned property is cared for via a joint account, it could later be considered a joint asset, so maintaining dedicated bookkeeping procedures is wise. The overall practice of good recordkeeping is essential if couples seek to maintain separate property. Knowing, and documenting assets each party brings into the marriage is both wise and strategic in the event of later controversy.
Pre-nuptial and post-nuptial agreements can be a sore subject, but every couple should at least consider the possibility. Consulting with a qualified family law attorney either before marriage or as soon as divorce is considered an option, may provide valuable insight and guidance regarding the law of joint assets.