One of the benefits of a prenuptial agreement is that it can allow a person to protect their retirement funds. Retirement accounts are marital assets and often divided in divorce; but a prenuptial agreement can prevent that in some cases. Retirement funds are normally considered to be marital property because they are funded with money that was earned during the marriage.
A prenuptial agreement protects assets in case of divorce and serves as a legally binding contract that protects the finances of both spouses. These agreements differ depending on a couple’s specific circumstances, but typically state what assets are owned jointly and individually and what assets can or cannot be divided in case of divorce.
A prenup could keep a couple’s retirement assets separate and clarify expectations, such as if the working spouse has to contribute to the non-working spouse’s retirement fund.
A prenup can declare a certain percentage or all of a spouse’s retirement fund separate property and not jointly owned. All couples should consider a prenuptial agreement, even if neither spouse has high value assets, because any money earned during a marriage is considered a marital asset and could be split in a divorce.
Prenups can stipulate that money earned during the marriage does not count as a marital asset. A prenup could only include a retirement fund stipulation or be much more comprehensive to what can be split in a divorce or death.
Prenups can be practical for all couples and should be considered before marriage. When a couple is considering a prenup, it may be important to discuss their decision with a lawyer. An attorney could help draft the prenup in a way that clearly outlines what assets can be divided in a divorce or the death of a spouse. A prenuptial agreement is a smart way to legally protect your assets and keep your retirement fund to yourself. If you do not sign a prenup, your spouse could have a claim to your retirement savings. If you have any questions on how to draft a prenuptial agreement and protect your retirement funds, contact an experienced attorney today.