Clients who have either created trusts themselves before marriage or are beneficiaries of preexisting trust structures created by third parties might believe those trust structures will insulate the trust assets in a divorce. However, rarely will prior trust planning prevent a divorce lawyer from attacking trust structures in an attempt to poke holes in the planning to illustrate why the trust assets should be included in the marital balance sheet. The trust protection becomes much less clear if the married couple has relied on trust distributions to support their lifestyle, if trust assets have become commingled with marital assets, or if the trust assets have appreciated during the course of the marriage, in which case the appreciation may be subject to division in the event of divorce.

A prenuptial agreement can shield trust assets in the event of divorce. Prenuptial agreements should be signed as far in advance of the marriage as possible and should meet the following requirements:

• the agreement is fair and equitable when signed, and potentially at the time of enforcement as well
• there has been full and adequate disclosure
• each party has been represented by competent counsel

a prenuptial agreement can deal with the following:

• division of property on divorce;
• whether particular items are considered community property or separate property;
• ownership of the marital residence;
• responsibility for premarital debts;
• distribution of property on death (although you also need to update your estate planning documents to reflect his);
• alimony obligations;
• financial responsibilities during the marriage;
• under which state's law the prenup is (otherwise it will be the state of the divorce, and not the marriage);
• how disputes about the prenup are to be resolved (for instance through mediation or arbitration); and
• sunset clause – many couples allow that their prenuptial agreement will not be valid if they are married for a certain number of years.

Prenuptial agreements cannot deal with the following:

• custody of the children (this includes things such as in what religion to raise the children, their schooling, etc.);
• visitation to the children;
• child support;
• anything “illegal” (as with most contracts); and
• anything “unconscionable” (unfair)
• anything that is thought to encourage divorce;

Depending on the amount of assets and the provisions for any alimony, a prenup is relatively cheap and can be drafted after with very little hassle. If negotiations need to occur, then obviously much more time and money.

If you are thinking about getting married, make an appointment for a consultation and I can help cover your financial bases. I can also provide review of proposals that have been drafted by your fiance's attorney.