Every divorce has to deal with a few fundamental components. One of them has the potential to be incredibly contentious: the division of assets. What’s an asset? It’s the money in your bank account(s), the car(s) in your driveway, your house, your favorite cutting board, the most comfortable couch, the new bed you just bought, you’re amazing 8k TV, that super cool painting you bought on your last vacation, and (just about) everything else you own. Divorces are already an emotional time. Combine that with the emotional attachment to our stuff (and the prospect of having to give up “some of your stuff” to the person you are divorcing) and you have a recipe for potential disaster! So… how do we protect your assets during a divorce?

The best way to protect yourself and your assets is to have an agreement in place with your spouse of how you want to approach asset division before you get into the emotionally charged situation of a divorce. In the legal world, we typically call those agreements either a prenuptial (signed / agreed upon before you’re legally married) or postnuptial (signed / agreed upon after you’re legally married). You’ve probably heard them called a prenup or postnup.

These agreements (at a high level) put in place a framework for the courts, lawyers, and parties in a divorce to follow if divorce proceedings are required. Divorce settlements usually divide assets gained during a marriage, though there are exceptions. Having a signed agreement can help protect what belongs to you. The prenup or postnup can outline how you’ll handle things like income, bonuses, stock options, or who will keep specific assets, such as a vacation home. Another thing you can do is document gifts and inheritances. These are generally considered separate property.  The best way to protect these assets is to keep them separate and not commingle them with any marital funds or assets. These agreements can also be applied to safeguard businesses built during the course of the relationship. Framing the conversation around protecting the company and its employees can help ease any discomfort.

A term you may be familiar with is “community property.” Currently a handful of states have a default community property division of assets during a divorce (meaning that without a prior agreement in place, the default approach the court will take is to divide assets 50/50 between the parties in the divorce). For divorces in Alaska however, community property is not the default law of the land. Alaska law dictates that there be an equitable distribution of assets during the divorce (which is not necessarily a 50/50 split). This is a critical consideration for you given your family situation: are both of you working or is one of you a stay at home parent? Are there children or pets in the picture that might require some sort of post-marriage financial support? Is there property, or a business, or any other significantly large asset that cannot be neatly divided in half? All of these scenarios will be in play in a divorce!

Unfortunately there is a stigma around these sorts of agreements in American society. Obviously it can be a delicate conversation to have with your partner; no one goes into marriage planning on getting a divorce. But, given the potential financial and legal headaches that can occur when such an agreement isn’t in place, it is well worth having the conversation! But what if you’re already married? Fortunately postnups can be signed even after years of marriage, but timing is key. It’s best to bring it up when you’re both calm and on the same page—not during a disagreement. Both parties should get independent legal advice before signing to ensure the agreement holds up in court. Without proper legal guidance, the document may not be legally enforceable.

A prenup/postnup can save you significant headache, heartache, and time during a divorce. Remember that time is literally money in any court proceedings. The stark reality of a divorce is that the more contentious you and your partner are about it, the higher the cost to both of you will be. The more reasonable you can be (both during the proceedings and before) the more money you’ll save!

The Law Offices of Nicole Daussin can help both with your divorce or with the drafting and planning of your prenup or postnup agreement. Contact Us today to setup a consultation!