This is the next article in my series on the benefits which spouses can gain from a prenuptial agreement. My last article discussed how a prenuptial agreement can protect a spouse from one’s tax problems. When a prenup is in place, the IRS will consider all property and wages of the spouse to be “separate.” An experienced attorney can assist you with determining how the law and tax regulations may apply to your given situation. In this article, I will be discussing how a prenup can protect a significant other from creditors. If you need assistance, then contact my office today to speak with a Las Vegas family law lawyer.
As I discussed in my previous article, Nevada is a community property state. That means that property which the parties acquire together is considered to belong to both equally. It generally will not matter how the property is titled. Also, the wages of each spouse are considered as belonging to both equally. These concepts can create a problem when one spouse enters the marriage with pre-existing debt. If a creditor takes collective action against a spouse then, under state law, they will be able to consider one-half of the spouse’s wages, and other property, as belonging to the debtor spouse. This means a spouse may very well find their wages garnished as a result of their significant other’s pre-marriage financial irresponsibility. A prenuptial agreement can prevent such problems.
The foregoing concepts are best explained through an example. Suppose Joe Husband defaulted on a $25,000 loan prior to marrying Jill Wife. Now suppose that the creditor has obtained a judgment against Joe, meaning that they may garnish his wages. Since becoming married, the couple has purchased two newer vehicles in cash. Depending on several factors, the judgment creditor may be able to garnish Jill’s wages and place a lien on her vehicle, in addition to going after Joe’s earnings and car. Now suppose that, prior to marriage, the couple signed a prenuptial agreement. The agreement that all wages were the separate property of each spouse. Also, suppose that Jill’s car was bought with her wages and is in her name only. Finally, the spouses maintain separate bank accounts. Under this scenario the creditor would likely be unable to touch Jill’s earnings or assets as they are separate.
An important step towards ensuring that a prenuptial agreement remains effective against creditors is for the spouses to not “co-mingle” their assets. Using the example from above, suppose the spouses had been depositing their paychecks into a joint checking account, from which all of their expenses and bills are paid. Even though these wages were separate when they were earned, pursuant to the prenuptial agreement, the co-mingling of funds into a joint account can make the money “community” in nature. This would allow the creditors to attach the funds. It is, therefore, important to follow the terms of a prenuptial agreement otherwise the document may be rendered ineffective.
If you are getting married and are concerned about asset protection then contact my office today to speak with a Las Vegas prenuptial agreement lawyer. I practice exclusively in the area of family law and I pride myself on providing effective representation. I also assist those in the southern Nevada areas of North Las Vegas, Henderson, Summerlin, and Boulder City.