Retirement Savings In A Prenup

Retirement Savings
In A Prenup

Why Retirement Accounts Need Protection in Marriage

One of the most important reasons to get a prenup is if you have a retirement account coming into your marriage.

The Myth of Separate Property in Divorce

Here’s why: Even if you don’t have a prenup in place, everything you owned before the marriage is considered your separate property. And if you get divorced, you get to keep your separate property, right?

How Retirement Funds Get Commingled

Except this doesn’t work when you’re talking about retirement because your premarital account almost always gets commingled with marital money.

The Risk of Losing Your 401K in Divorce

Let’s say you’ve got a 401k coming into your wedding.

When you get married, you keep contributing to that same retirement account, except now, your paycheck is legally considered marital money. This means you’re mixing marital funds into an account that used to be considered your separate property. And if you end up getting divorced in 10, 15, 20 years, more than likely, you’re going to lose it in divorce. A lot of people think, Oh I don’t have that much to protect, I only had 25k, 50k, 75k in my retirement account when I got married – but over your career that can easily grow to 200K, 400K, 600K by retirement age- money that you could lose in a divorce if you don’t protect it.

Why a Prenup is Critical for Retirement Savings

This is just one reason why it’s critical to address retirement accounts in a prenuptial agreement – every day, someone is losing hundreds of thousands, maybe a million dollars in a divorce because they didn’t protect their 401K with a simple agreement that costs a few grand. Don’t be that person – get a prenup if you have a retirement account before marriage.