Prenup Lawyer in Seattle, Washington

A prenup, or prenuptial agreement is a legal agreement signed by both spouses before they get married. Couples can also sign these agreements after they get married, but in this case, they are called postnuptial agreements. A prenup basically outlines how you and your spouse would divide assets should you ever choose to get divorced in the future. A prenup also lists any assets and debts each spouse is bringing into the marriage. Because a prenup changes the way Washington law is applied during your divorce and can affect your rights, it is recommended to seek the assistance of a prenup lawyer in Seattle, Washington if you’re thinking of signing or drafting a prenup.

Washington is a community property state, which means that any assets or debts acquired during a marriage are considered shared property. This means that even if you are the only person named on the title of real estate, a car, or business, your partner would have a claim to the property in divorce if you acquired the property while you were married. Basically, under Washington state law, your spouse would have a stake in any financial move you make after you get married.

Washington is different from a common law state. In a common law state, the law allows for spouses to acquire separate property while married, as long as each spouse makes this clear when the property is purchased or acquired (only one person’s name is on the title or deed, for example).

If you and your partner want to be able to own and acquire separate property while married, you’ll need to have a prenup in place. Because most people don’t scrutinize the laws of their state before they get married, most people don’t realize how the laws of their state can affect their financial future. A prenup can eliminate assumptions either party might be making going into the marriage and clarify your financial plan.

While Washington state law offers guidelines for how property gets divided in a divorce, many couples appreciate the peace of mind that comes from signing a prenup, because a prenup can also offer clarity when state law becomes vague. Truce Law is a Seattle prenup law firm that can guide you and your future spouse through the prenup process. If you want to explore situations where you may want to consider a prenup, we’ve written extensively about scenarios where a prenup can help here.

In this article, we’ll explore in more depth what would happen in a divorce if you don’t have a prenup and then delve into the ways that a prenup can clarify gray areas of the law.

Topics we will cover include:

• What does a prenup do?
• Why hire a prenup lawyer?
• What happens if you don’t have a prenup?
• How having a prenup helps.
• And next steps.

Let’s explore each of these topics in more depth below.

What Does a Prenup Do?

A prenup serves several key purposes. First, a prenup is a legal document that will outline the assets and debts you are bringing into the marriage. It will also outline the assets and debts your partner is bringing into the marriage. In this way, a prenup serves the key function of defining separate property and debts. A prenup lawyer can walk you through this process, because as you list your assets, you’ll need to decide whether you want to convert this property into marital property (shared property) or keep this property separate. The key distinction between shared and separate property is that shared property or assets would be subject to division during divorce, while separate property is property you bring into the marriage and property you would keep if the marriage were to end. Your prenup lawyer can help you understand the steps you may need to take to ensure that property you intend to keep separate stays separate, and in some cases, a prenup lawyer might refer you to a trust and estate lawyer or financial planner to help you take the necessary steps.

As you can see, a prenup offers each person awareness about how marriage can affect their rights and their property. Many couples get married, open a shared bank account, and don’t even understand the legal and financial ramifications of the decisions they are making. You and your partner may choose to convert separate assets into marital assets, and that’s fine, but the prenup at least gives you and your partner awareness as you take this step.

The second function of a prenup is to clarify what would happen to shared assets should you and your former partner get divorced. Because Washington is a community property state, without a prenup, any property acquired during the marriage would be subject to division during your divorce. A prenup can change the way Washington state divorce law gets applied in your divorce. For example, if you plan to start a business, or purchase real estate and want to keep these assets separate after you get married or part of your own portfolio, a prenup is a legal instrument that can create clear boundaries between your business and marital assets. Some couples don’t want to involve their assets in marriage at all and choose to keep separate bank accounts and maintain separate title to property. A prenup can clarify these goals, so that the court wouldn’t consider property acquired during the marriage shared property. A prenup can also clarify how debts are handled. If one partner will be getting into significant student debt (because he or she plans to go to law school or medical school, for example) a prenup can clarify whether these debts would be shared or separate. If one partner plans to take out significant loans to start a business, a prenup can also clarify who will shoulder the burden of these debts.

Why Hire a Prenup Lawyer?

Because a prenup can change the way Washington law gets applied, if you do plan to have a prenup, it is important to do it right. If you ever get divorced and have a prenup, the court will look closely at how the prenup was created. For example, a judge might see a prenup as suspect if there are errors in the prenup, if the prenup takes away all of one’s spouse’s rights, and if the prenup was signed too close to the wedding date. If lawyers weren’t involved in the prenup process, the judge may also scrutinize the prenup more closely, and may even reject it. This is why it is wise to hire a prenup lawyer in Seattle, Washington.

Washington state closely scrutinizes any prenup and it must pass something known as a “two prong test” in order to be upheld. The first, “prong” of the two-prong test is to determine whether the prenup deviates from what the court would require were there no prenup in place. Most prenups won’t pass this part of the test because in most cases, the purpose of a prenup is to change how Washington law gets applied. The second “prong” of the test is whether both parties entered the prenup “knowingly and willingly.” This means that both parties understood how they were deviating from state law, and understood the rights they were giving up.

To increase the chances of passing the second part of the “two prong” test, here are some things you might want to consider doing:

• Each spouse will have to hire their own prenup attorney to represent them during the drafting and finalizing of the prenup.
• The process of negotiating the prenup must be clearly documented.
• All assets and debts must be disclosed and listed in the document.
• The prenup must be signed and executed well before the wedding date. There can’t be any sense that one person was pressured into signing the prenup to get married. A way to eliminate this possible objection to the prenup is to re-affirm the prenup after you get married.

Truce Law is a Seattle, Washington prenup law firm that works with couples to help them get their prenup right. As a collaborative divorce law firm, we know what issues can typically arise during divorce, and what situations can result in a more amicable divorce proceeding. We work with couples before they get married to help them get clear about their finances, their debts, their assets, and about their intentions for their marriage.

What Happens if You Don’t Have a Prenup?

If you don’t have a prenup, and intend to get divorced, in Seattle, Washington state property division laws will apply in your divorce. Washington is a community property state, which means that any property or debts acquired during the divorce will be considered shared property and debts, and subject to equitable division laws. According to Professor Terry Price at the University of Washington School of Law, Washington state law does acknowledge separate property during a marriage, but usually this is property acquired as a gift or inheritance to only one spouse. Any property acquired using earnings from the marriage is generally considered community property.

Division of property in a divorce is a complex area of the law. There are gray areas. Under Washington law, community property must be divided in a manner that the courts consider “just and equitable.” Note that the law doesn’t say that property needs to be divided 50/50. It also doesn’t say that a partner who makes all the money gets to keep all the money and assets during a divorce. Even if you bought a car or home with only one partner’s income, and even if only one partner’s name was on the title, the home or car will be considered community property.

If you get divorced without a prenup in Seattle, Washington, you’re basically putting the final decision for your assets, debts, and financial future in the hands of a judge and the state.

What happens if you don’t have a prenup and are getting divorced in Seattle? First, the courts will look at your property and distinguish between “community property” and “separate property.”

• Community Property is any property (money, real estate, cars) that you and your spouse acquired during the marriage. Any money you make after you get married is community property. There are some exceptions to this, like inheritance or gifts.
• Separate Property is any property you brought into the marriage and owned before you and your partner got married. This includes any vehicles you purchased, any real estate you owned, and any money you made. However, separate property can be converted into community property if you aren’t careful to keep separate property separate during your marriage. Putting a partner’s name on the title of a home and putting money you brought into the marriage into a shared bank account could affect how the court views this property.

Distinguishing between separate and community property can get complicated. If you put your partner’s name on the title of any property you brought into the marriage, you may be turning that property into marital property. The same is true if you add a partner to a car title. If you lived together with your partner before you were married and shared a bank account, this might also be considered community property. If you own a home before you get married, then get married, and your partner helps pay the mortgage or makes improvements on the home, determining whether the home is still community or separate property can get complicated. The courts may need to consider the value of each partner’s contributions, and the value of living in the home the other partner gained.

Similar rules apply for community debts and separate debts. In general, debts you took on before you got married will be considered separate debts, and any debts you took on after you got married will be considered community debts.

Community and separate property laws can get complicated if one partner owns a business before getting married, or if one partner starts a business after getting married, or if both partners work on a business together, or if marital assets are used to start the business. Even if only one person is the owner of the business, community property laws may apply to the business, meaning that if you get divorced, your ex may have the right to claim some of the value of the business.

Even once the courts have clarified and distinguished between community and separate property, the courts (ideally the divorcing couple) will need to decide what is a “just and equitable” division of the property. If the case ends up going to court, the judge may look at different factors, like which parent will have custody of the children, the financial situation of each person on their own, each person’s earning capacity, as well as each person’s age, education, and work situation. For example, the courts may award alimony to the partner who stayed at home to raise children or support the other partner’s career. Generally, the courts do not want to see one party leaving a marriage very wealthy and the other one leaving in poverty.

How Having a Prenup Helps

A prenup can clarify some of the “gray areas” in Washington state law. For example, if you own a business going into the marriage, a prenup can make clear what, if any, stake in the business your future spouse will have. If one person brings into the marriage significant savings or wealth, a prenup can clarify what assets will be considered marital property and what assets you intend to keep separate. For example, as a marriage progresses and as couples share bank accounts and blend incomes, they can sometimes lose track of the money each person brought into the marriage from their personal savings. If you own real estate or a home, a prenup can clarify who owns the home. If you will inherit anything from your family, a prenup can clarify what aspects of the inheritance are community property and what will be considered separate property. If you have children from a prior marriage, a prenup can make clear which assets will go to the children and which to your spouse should you pass away.

A prenup isn’t the only way to protect assets and property. A trust or estate planning lawyer can also help you put certain mechanisms in place to protect assets.

As more people enter marriage with student loan debts and as they enter marriage later, having potentially amassed wealth or assets, they find it important to make financial expectations clear. Other couples have special circumstances, like children from prior marriages, wealth, a family business, or debts and they would like to make plans and financial responsibilities clear.

Next Steps

More and more couples are choosing to sign prenups before they get married. As more couples enter marriage with more complicated financial lives and more debts, it becomes even more important to have these discussions surrounding money and assets, and the prenup process is one formal way to do this. If you are considering a prenup, contact Truce Law, a prenup lawyer in Seattle, Washington today. Our team of lawyers have the tools to help you draft a prenup that works.