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How to reinforce your prenup’s protections on future income

On Behalf of | Dec 28, 2021 | Prenuptial Agreements |

Before you marry, you may wish to draft a prenuptial agreement. Perhaps you know you will be coming into a lot of wealth and you do not want to lose much of it in a divorce. With a prenuptial agreement, you may designate this future income as separate property so a judge will not consider it to be marital property and thus eligible for division.

However, signing a prenuptial agreement may not be enough. Smart Asset suggests that couples who have designated future income as separate property in a prenup should reinforce that designation with a few key actions.

Keep separate accounts

You should make sure to treat your designated income as separate by not mixing it with your marital funds. A judge may consider that action as commingling your separate property, which will make it lose its separate status. Instead, keep your future income in a separate account. Whether you use a separate checking, savings or retirement account, your actions may show that are you taking your prenup seriously.

File taxes separately

You will likely have to pay taxes on your designated income, so consider how you will file taxes on that income. Filing a joint return with your spouse may undermine your prenup’s conditions. Instead, you may file a separate return on your income to help keep up the separate nature of your designated income.

Use a postnuptial agreement

In the event you want to make changes to your prenuptial agreement after getting married, writing a postnuptial agreement is a possible option. This allows you to update your prenup to reflect your new priorities for your designated income. You may want to do this if your financial fortunes or those of your spouse suddenly change.

Remember that it is possible for a judge to rule that a prenuptial agreement is invalid. In the event you file for divorce, you may have some peace of mind that you have helped preserve some of your major assets with your actions.