Under Nevada's community property laws, every dollar earned by either spouse from the date of marriage is owned 50/50 by both of you. Even assets you owned before marriage--like your house or retirement account--can become joint property if you contribute any income earned during the marriage to them. Just because an asset is in your name alone does not mean that asset is 100% yours under Nevada's community property laws. A prenup changes that.
A well-drafted prenup serves a few important purposes. Firstly, a prenup clearly defines who owns what in the marriage. A prenup should ensure that your personal assets remain yours rather than accidentally becoming joint property because you contributed to them doing the marriage. A prenup can be especially valuable if you are bringing significant assets into the marriage and want to protect them.
Most parties to a prenup intend to create at least some joint assets during the marriage, which a prenup helps facilitate. A well-drafted prenup should require an affirmative act to create a joint asset. For example, a prenup should defer to subsequently-executed titling documents, such as deeds, titles, or other written agreements. If a home is purchased and both spouses are on the deed, then the prenup says you own the home 50/50.
A prenup simplifies bank accounts and financial assets, too. Without a prenup, every bank account you deposit your income into is at risk of becoming community property. For bank accounts, a prenup should state that the account is owned by the person whose name the account is in (while clarifying that beneficiary interests are not community interests).
A prenup addresses the creation of joint bank accounts, which are common even when there is a prenup. To simplify, a prenup can state that joint accounts are owned 50/50 and that every dollar that goes into the joint account is owned 50/50 regardless of the source. Once you put money into a joint account, it is jointly owned. A prenup can go one step further and state that anything purchased from a joint account is a joint asset, which includes furniture, memorabilia, etc. So, if you want to jointly own an asset and the asset does not have a titling document, buy the asset from the joint account. Straightforward and simple.
Prenups seek to avoid expensive divorce litigation. Clearly outlining the division of assets in advance helps to minimize disagreements and potential legal battles later. A prenup provides a straightforward solution to dealing with financial matters both during and after the marriage.
In summary, prenuptial agreements simplify your marital finances. A prenup establishes ownership rights, facilitates the creation of joint assets, and prevents complex legal disputes. With a prenup, you can ensure that your assets remain protected and the financial aspects of your relationship are clear and straightforward. So, if you're considering marriage, it's worth discussing the benefits of a prenuptial agreement with your partner to ensure a smooth financial journey together.