Boss Lady

How to protect your assets and investments against divorce

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On the eve of a wedding, the couple hope to live happily ever after. And in fact, a lot of people do. Fortunately, getting divorced is still far less common than getting married. But if something goes wrong, emotional exhaustion can be accompanied by intense headaches arising from the dispute over assets, and it is possible that one of the spouses will be greatly harmed. This is where a cohabitation financial agreement — commonly known as a prenuptial agreement or postnuptial agreement — can save you.

A prenuptial agreement) or a postnuptial agreement developed once you are already married may seem like something from a soap opera, or something just for millionaires or defeatist people who are getting married but already thinking about separating.

All these prejudices sometimes make these a taboo subject, but the truth is that this type of agreement is nothing more than smart financial planning in the event of an eventuality, which can make life easier for those who have financial investments prior to marriage or who intend to acquire assets over the course of their marriage. life.

The standard regime, under law, may seem reasonable to most people. That is, in theory, the couple reasonably divides their assets, even if only one of the spouses has paid the instalments on the house or put money in savings. Anyone who does not make a prenuptial agreement or postnuptial agreement is automatically included in this property regime.

But at a time when men and women are already able to build a career and acquire their assets with the fruit of their own sweat, the plan can backfire. Families have changed. Researchers estimate that globally, 41% of all first marriages end in divorce, while 8. 6% of second marriages end in divorce.

In addition, young people are increasingly aware that a cohabitation financial agreement and financial planning are important, often because they start investing and planning for their retirement long before they think about getting married. So the prenuptial agreement or postnuptial agreement is gaining in popularity.

The legal entity trap

The possibility of losing part of the acquired assets or investments made on their own account has already led many people to try to escape sharing by ‘hiding’ their assets behind a legal entity. But what seems like a smart strategy can actually be considered a crime. The judge will certainly perceive bad faith, especially if the injured spouse also has this perception.

How to do a prenuptial agreement

The prenuptial agreement is a deed made by mutual agreement and prepared by lawyers — often by family law or divorce lawyers who are most skilled in this area. Those who already have assets prior to marriage or intend to acquire them throughout their lives will find it practical to simply make a prenuptial agreement.

As much as they are in love, the couple may prefer to protect themselves from misfortunes, but for that they need to agree on the sharing regime. This type of agreement is especially needed if at least one of the spouses has children from a first marriage.

Through a prenuptial agreement, the couple can create their own rules. Even those who wish to marry in partial community of property can benefit from an agreement, choosing the assets that would be left out of a divorce division. This is the case, for example, of the person who started investing in an open private pension plan when she or he was still young.

How to do a postnuptial agreement

Changing the property regime after marriage is also possible, through the so-called post-nuptial agreement.  Unlike the prenuptial agreement that is made before marriage, the postnuptial agreement is made any time after the constitution of the marriage. It should also be drawn up by lawyers who are specialists in the field of divorce.

The first objective of the post-nuptial agreement is to change the property regime chosen at the time of the marriage. But for this there are two possible scenarios:

At the time of the wedding, the couple entered into a prenuptial agreement to choose the property regime, and during the marriage they realized that that regime no longer meets their property needs, thus deciding that it would be better to choose a new regime, either it a more comprehensive regime or a more restrictive regime. Or the couple at the time of the celebration of the marriage did not make a prenuptial agreement, therefore, they did not choose a property regime. However, now with the marriage already performed, they realized that the property division law as it stands does not meet their property needs, and in this way they intend to change the marriage property regime.

That said, remember that maintaining the common divorce property regime can lead to loss of assets and contamination of assets by debts acquired by the partner, which can affect the future of your financial stability — or even the future of your business. This is why a post-nuptial pact can protect you.

Can you change a prenuptial agreement to a postnuptial one?

Yes. The first thing you need to know about the prenuptial agreement or a postnuptial one is that it is desirable for both spouses to agree on the legal contract, and this is the case for changing a prenuptial agreement to a postnuptial one — which  is why we outlined that you will need to have the advice of a lawyer who is a specialist in the field of family law and divorce law.

If there is an existing prenuptial agreement that you wish to change to a postnuptial one, there should be good reasons to motivate the request to change the property regime. If there is disagreement, it may result in a legal case explaining the reasons that justify the change — that is, there must be a cause for this to occur — which will be evaluated by the judge responsible for judging the case.

In the case of changing a prenuptial agreement after the wedding, the rights of third parties must be respected, which means that if this change has the objective of defrauding creditors or evading an existing debt, this change will not be allowed.

How do cohabitation financial agreements protect your business?

Among the various reasons that lead a couple to choose to change the property agreement in marriage, without a doubt, the independence of each one’s financial security is the one that stands out the most. And the divorce rate is actually higher for business owners.

The hypothesis that each spouse has their own economic and professional life — which makes it convenient to have separate assets — may be sufficient reason for changing the financial agreement. In addition, the divergence in the administration of the couple’s assets can also be a reason to make the change.

Final words

Creating a cohabitation agreement, and then changing it if circumstances warrant, is the best way to maintain security of the parties regarding the vulnerability of their assets, so that the assets (and business holdings) of each are fully protected.

If your profession or business requires freedom of wealth management, this type of change can make your day-to-day easier, as you can dispense with your partner’s consent in the course of routine transactions during a divorce. In summary, a cohabitation financial agreement is an important legal tool in terms of family planning and wealth protection.

Photo by cottonbro

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