San Diego, CA · Member since 2016 · 44 posts · 31 votes
Hi All,
I ask mainly out of curiosity and because I *may* be getting married soon (yay). What happens to investment rental properties and investment brokerages in my name only both before and during a marriage in the case of a divorce? I've heard a lot of conflicting points on the matter and would like some insight into the matter. I am from California if that helps! Thank you.
I'm a family law forensic accountant in CA so to try and keep things organized and clean and to achieve the result that you want, I definitely suggest you speak to an attorney. In my experience, not only should you keep the assets in your name only, but you must also keep separate and community funds separate. For example, once you get married W-2 income is considered community funds, if those are ever deposited into the brokerage account or if you use community funds to pay down the principal mortgage on the real estate then you've commingled separate and community. The community now owns a portion of the real estate even though they are not on title. That is a simple explanation, and I'm not sure of your particular situation. If you would like to speak more or need further clarification feel free to reach out.
Consult a lawyer and review settle agreement. If your partner was never part or have invest money or time and you took care of it all it is unlikely someone will seek 50-50. But not everyone is that way.
Depends on your state laws. CA and many other western states and I think WI are community property states, having their own set of rules. 17 states are Tenants by the Entirity states, and have their own set of rules.
In any event a detailed Pre-nuptial Agreement drafted by an attorney specializing in pre-nuptial and post-nuptial agreements is essential. You new spouse has to agree to all the terms and the document has to be signed and notarized. each party should have an original signed copy as well as both attorneys. Some people even record their pre-nuptial agreements in the courthouse for future selling of properties.
Somebody i know went through a difficult divorce, that took several years and cost over $400,000 in legal fees and that was with a pre-nuptial agreement. Without one it would have cost them more. Wife ended up getting 70% of the extensive rental portfolio.
John Delorean of Pontiac and Delorean car fame had length. costly and well publicized divorce centered around what was and was not a valid pre-nuptial. One of the key points of the case was that he had asked his bride to sign the documents the day of the wedding and that his assets were vaguely described in the documents.
@Julie Marquez wow! wow! great story if only all divorces could be that amicable. No expensive legla fees, just two people who appreciate and respect each others contribution over the years.
@Anastasia Jordan I am so feeling you. Why on earth do people get legally married in the first place? However, if 2 people live together for a few years, there are still legal issues when there is a split. I dont know the exact number of years.