Protecting Your Assets Without a Prenuptial Agreement

Exploring Alternatives to Prenuptial Agreements: How to Protect Assets Without a Prenup

Prenuptial agreements, or prenups, are legal contracts that protect each spouse’s assets and financial interests if their marriage ends in divorce. Despite the legal benefits of a prenup, you may not want to get a prenup for a variety of reasons:

Reasons For Not Getting a Prenup

Moral obligations or negative attitudes

You may feel that asking for a prenup implies you are expecting the marriage to fail. Or you think it shows distrust in your partner. These attitudes can sour the start of a marriage.

You want your divorce to follow the laws of the state

The prenup limits what the court can divide up. Without it, state law determines who gets what. You may prefer to let the court make those decisions.

You don’t want to disclose all your assets to your spouse

Full financial disclosure is required for a binding prenup. But you may want to keep your assets private from your future spouse.

There can be many more reasons why, but regardless of what they are, you may still want the security of knowing that your assets are protected in your divorce settlement. While a prenuptial agreement is an easy way of ensuring your property remains yours, there are still ways to separate your assets and keep them in your possession following the dissolution of your marriage.

What is a Prenuptial Agreement?

A prenuptial agreement, commonly known as a prenup, is a legally binding contract signed by a couple before they get married that outlines what would happen to assets, debts, and spousal support obligations if the marriage ends.; A prenup allows those marrying to protect any premarital assets and set their own terms for division of property and spousal support ahead of time rather than leaving those matters to state law.

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Ways to Protect Assets Without a Prenup

Separate Your Finances

Keep your premarital accounts separate. It’s vital to safeguard your finances without a prenuptial agreement.

Have individual bank accounts

Legally separate your finances by having individual bank accounts or a dedicated joint account for your marriage. Courts generally consider premarital funds jointly owned when you mix them with joint assets.

Don’t mix premarital funds

For example, you might pay a home maintenance bill with money from your separate account. Regardless of how much the bill was, the account will become a marital asset.

Beware creditors and debts

Creditors can go after your account to pay your spouse’s financial obligations. So imagine they buy an expensive car with a loan. Your name may not be on the title, but if you contributed to the payment with your own money, you’d still be obligated to repay the debt.

Separate Your Assets

To protect assets before marriage, a spouse may want to separate them from the marital estate. The different kinds of assets a spouse may want to keep separate include:

Real Estate Property

Keep your real estate separate by ensuring that only your name is on the deed. The court may deem your real estate property as marital property if you don’t keep it completely separate. To prevent this, always use separate funds to maintain the property. Even if you didn’t list your spouse as a joint owner, they could claim an interest in it if you used marital funds to maintain it.


If you get an inheritance during the marriage, it can still be non-marital property if kept entirely separate from the marital estate. If your inheritance is a significant financial sum, separation would be a case of not mixing a part of that money with your marital assets.


A gift made directly to one spouse would be considered a non-marital asset. But suppose you receive a large sum of money as a gift. If jointly owned funds or earnings from your job are deposited into the account holding that gift, it is no longer a separate property. In that case, the entirety of the gift will be subject to the property division laws of your state.

Appreciated value

The value of your property can be appreciated during your marriage. Whether it’s your home, income, business, retirement assets, or investment accounts, the appreciated value of the asset becomes marital property after marriage.

Depending on your state, a divorcing spouse can be entitled to half of those appreciated assets, particularly if your spouse’s efforts have served to increase its value. Unless waived in a prenup, the court will consider the appreciated value as marital property when you divorce.

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For example, if your separately owned business was worth $10 million on the date of your marriage, and it’s worth $20 million by the time of your divorce, your spouse would be entitled to one-half of the difference, i.e., $5 million.

Document Everything

It’s vital to have records of your finances and assets, so you can provide evidence of ownership when ready.

Take a snapshot before marriage

Consider taking a snapshot of your assets right before your marriage. The more records you keep that identify your premarital property, the better chance you’ll have of keeping your property after your divorce.

Document inheritances and gifts

The same holds true for assets you receive during the marriage, like inheritances or gifts. These are generally deemed non-marital property with the proper documentation in place.

Document property ownership

For real estate, a spouse may keep the property separate from the marital estate. But this is only if you can show evidence of separate ownership. You must confirm that only non-marital funds were used to pay the mortgage, property taxes, upkeep, and maintenance.

The more documentation of payments, bills, and purchases, the better. For example, a separate home that turns into a commingled marital home may be divided equally upon divorce despite the amount of personal equity you had in the original home.

Retirement accounts

Retirement accounts are another form of personal property where documentation is essential. If you can produce evidence of retirement account statements obtained before you married, the court may let you keep the premarital amount and divide the rest in a divorce. Without such documentation, the spouse you are divorcing may be entitled to half of the money in your retirement account.

Get a Postnuptial Agreement

If you’re looking for prenup alternatives, one option you can consider is a postnuptial agreement. It’s essentially a prenup after marriage. It’s still a contractual arrangement addressing the division of assets and works well for a marriage without a prenup.

For example, if you sell your premarital home to buy one jointly with your spouse, a postnuptial agreement can establish what part of the house is owned by whom. You should be able to arrive at a fair postnuptial agreement that rewards a spouse for the equity they had already built up in the premarital asset.

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Get an Irrevocable Trust

Irrevocable trusts are becoming more prevalent as an alternative to protect assets in a divorce without a prenup.

For a prenup to be enforceable, a court will consider if there was a full disclosure of assets and liabilities. The court would not deem the prenup fair and reasonable otherwise. However, there can be reasons why a spouse may not feel comfortable disclosing all their assets.

A spouse may have concerns that their fiance is only after their wealth. If so, they can place some or all their assets into a trust for the benefit of their children or other chosen beneficiaries. This method would protect future inheritances for your children from a prior marriage.

When you deposit financial assets into a trust before marriage, they are protected because they would be considered property of the irrevocable trust and not part of your marital estate. Technically, you would not own the assets any longer. This is a critical distinction in a divorce.

If it turns out that you later need or want some or all the assets held by the trust, the named trustee may add you as a beneficiary.

Consult with an attorney to determine the exact details of where and how you can create your trust to provide maximum protection of your assets.


While a prenuptial agreement offers the best protection for keeping your assets separate in a divorce, there are still good alternatives. By properly separating and documenting your finances and property, you can still shield much of your wealth if your marriage ends. An irrevocable trust also works well for those who want to


1.What if I deposit money from an inheritance into our joint bank account?

If you deposit money from an inheritance or other separate asset into a joint bank account, it becomes marital property. To keep an inheritance as your separate property, it must remain in an account that only you own and control.

2.What paperwork should I gather before getting married?

Before getting married, collect statements showing account balances, property values, retirement savings, and any debts you owe from before the marriage. This establishes a record of what you brought into the marriage as your separate property.

3.Can I undo commingling of assets?

Unfortunately, once you combine separate assets by mixing them into joint marital assets, it becomes very difficult to untangle them. Courts tend to consider commingled assets joint marital property. The best practice is to keep your property and finances separate from the very start.

4.Is a postnuptial agreement as strong as a prenup?

Courts scrutinize postnuptial agreements more closely than prenups. But as long as you negotiate it properly with full financial disclosures and independent legal advice, a postnup should still hold up in a divorce.

5.Can I access assets placed into an irrevocable trust?

With an irrevocable trust, you permanently give up ownership and control over the assets. However, you can build flexibility into the trust terms allowing you to receive distributions if certain conditions are met in the future. Discuss options with an estate planning attorney.

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