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How prenups can help couples talk about money

On Behalf of | Jul 25, 2019 | Divorce |

Couples in Washington who are getting married might want to consider a prenuptial agreement. A prenup offers couples the opportunity to define what assets they are bringing into the marriage that they want to keep separate as well as how they will divide property in case of divorce. The prenup can also address whether one person will pay support to the other.

Whether a couple gets a divorce, one advantage of a prenup is that couples must share all information about their debts and assets. This can provide a solid foundation for continuing to talk about finances during the marriage. In some divorces, one person might be surprised to learn that his or her spouse has accumulated debts. When ending their marriage, divorce, both people might be held responsible for the debt. Furthermore, while debts brought into a relationship are generally considered to be the property of the individual debtor, after years of marriage, it can be difficult to identify the origins of assets and debts.

It is fairly common for one spouse in a marriage to manage the finances. This can leave the other person at a disadvantage in the divorce. Openness about money during the marriage combined with a prenup may prevent this from happening.

In a community property state like Washington, if there is no prenup, marital assets are subject to equal division. However, couples might negotiate an arrangement in which assets are divided equally but not 50/50. For example, one person might keep a retirement account while the other individual retains the home. When assessing the value of these assets, it is important to account for whether there will be taxes upon withdrawal of the retirement account and what expenses are associated with keeping the home. A couple may be happier with an agreement they negotiate than one at which a judge arrives in litigation.