While prenuptial agreements are one of the best tools when it comes to protecting assets in case of a divorce, many people are hesitant about them. Fortunately, there are ways for Minnesota residents to protect their assets without a prenup. First, a couple does not need to discuss finances just in relation to prenups. Instead, a couple can assess how to handle finances when marrying.
Combining assets is not always the best idea. It may make more sense to keep premarital assets separate if one partner has debt. This is because all joint assets might be at risk from creditors regardless of which partner acquired the debt before the marriage. A couple could combine some premarital assets or just maintain separate finances. Partners can also open new accounts instead of combining existing ones.
Property appreciation is somewhat trickier. Even with premarital separate property, post-marital appreciation could be classified as joint property. This does not apply with funds that appreciate passively like publicly traded stock. However, one might do something that cause a home to gain value after a marriage. Even when acting solo, this gain may fall under marital property if it happens any time after a marriage but before a divorce.Diligent record keeping is important when protecting assets, and trusts are another alternative to prenups.
Funds in separate accounts can be used for the benefit of the marriage. This offers no problems if a couple stays together, but they may have to pay attention to what the funds are used for. If one party owns a home but the other person uses his or her own funds to make improvements to the house that add to its value, this person may be entitled to a share of the property.