19 Apr Off
Marital property agreements, also known as prenuptial or post-nuptial agreements, are an effective way of defining how property should be distributed in the event of a divorce. They are also an effective estate planning tool. A marital property agreement is a flexible written document exclusively between spouses setting out each spouse’s rights and obligations with respect to both spouses’ property regardless of when it was acquired. Typically, Wisconsin law treats income and possessions acquired by a couple after their marriage as “marital property.” Marital property agreements allow spouses to structure and change the way that all or a part of their property is classified under the law.
Marital Property Agreements Can Be Used to Avoid Probate
Marital property agreements may also be used as a tool to avoid probate. The Wisconsin Marital Property Act provides that married persons may agree that upon the death of either spouse, either or both spouses’ property, including any after-acquired property, may be transferred without probate to a designated person, trust, or other entity. As a result, marital property agreements, which direct how a married person’s assets are to be distributed, can protect those assets from probate, except real estate outside of Wisconsin. Wisconsin is the only state with marital property law.
Marital Property Agreements Can Be Used to Protect Against Creditors
Marital property agreements can also protect one spouse from the other spouse’s creditors. Once you are married, any debts or liabilities that are brought into the marriage or incurred during the course of the marriage by your spouse are considered yours also. A prenuptial agreement or post-nuptial agreement can protect YOUR separate assets and income from creditor claims against your spouse, provided the creditor has notice of the agreement.
Financial Planning for Children From a Previous Marriage
In the realm of estate planning, prenuptial agreements can also be an important element, especially if you have children from a prior marriage or relationship. Without proper documentation in place, your children will be entitled to half of your estate while your spouse will be entitled to the other half. Even if you designate unequal distributions in your will, your spouse can still assert his or her right to the spousal inheritance share (50 percent of the estate). A marital agreement enables you to make desired distributions to protect the interests of your children.
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