Got an impressive baseball card collection, a valuable piece of artwork, or some pricey jewelry that means a lot to you? Well, whatever tangible personal property you have that’s worth something can be protected in a prenup. If you think it could potentially cause arguments during a divorce, it’s definitely a smart move to include it in your prenup. You know what they say: better safe than sorry! That’s why we’re going to take a deep dive into how to add tangible personal property to your prenup in this article.
What is a Prenup?
A prenuptial agreement (prenup) is a legal agreement that outlines how a couple’s assets and liabilities will be divided in case of divorce or separation. Prenups can also include other provisions, such as spousal support, confidentiality, pet custody, insurance, and more. Prenups are always signed prior to the wedding day. (You can’t get a valid prenup during the marriage, that would be considered a postnup). Prenups are also emotional documents just as much as they are financial ones. The process of making a prenup requires in-depth communication, total alignment on life goals, and setting expectations with our soon-to-be spouse. It lays an excellent groundwork to start your marriage off on the right foot.
What is Tangible Personal Property?
Tangible personal property refers to physical possessions that have value. For example, your raggedy blanket from when you were two years old that is ripped to shreds probably doesn’t have a place in a divorce (does your future ex-spouse really want that? Probably not).
Here are some examples of tangible personal property you may want to consider adding to your prenup if they have value:
- Vehicles (cars, trucks, motorcycles, four-wheelers, etc.)
- Sports (or other) memorabilia
- Musical instruments
Regardless, the language in your prenup should encompass all types of tangible personal property, but make sure to include anything with significant value in your financial schedule, as well (more on financial schedules below).
Why Include Tangible Personal Property in a Prenup?
Including tangible personal property in a prenup can prevent disputes in a divorce setting by simplifying the division of property. Without a prenup, if a couple were to divorce, they would have to negotiate the division of tangible personal property. This can be stressful, expensive, and time-consuming, especially if the couple has a lot of valuable possessions. For example, if you own an expensive jewelry collection worth around $50,000, it’s likely that this may become a point of contention in the divorce (who gets the precious jewels?). With a prenup, you can decide beforehand who gets what and prevent a future dispute over your jewelry.
How to Include Tangible Personal Property in a Prenup
Including tangible personal property in a prenup involves the following steps:
Step 1: Understanding what personal property you own
The first step is to make a list of all tangible personal property that has value and you want to protect. This list should include a detailed description of each item, such as the description, title of work, institution, make, model, and/or serial number (if applicable).
Step 2: Determine the value of the tangible personal property
The next step is to determine the value of each item. This can be done by getting appraisals or consulting with experts in the relevant field. It’s important to be as accurate as possible when determining the value of tangible personal property.
Why do you need to know the value? Well, you will need to share this information in your prenup through a process known as financial disclosure.
In financial disclosure, both spouses must write down all of their assets, debts, and future inheritances, which includes tangible personal property. This means you will literally write down the value of the personal item in your financial schedule.
Step 3: Decide how you want to treat the tangible personal property in the prenup
The final step is to decide how the tangible personal property will be divided in case of divorce. This can be done in a number of ways, such as:
- Each spouse keeps their own tangible personal properties no matter when it was acquired (anything acquired or previously owned by each spouse will remain their separate property).
- Tangible personal property is divided equally (or proportionally based on contribution) between both spouses
- Each spouse keeps the tangible personal property they brought into the marriage, and any new items purchased during the marriage are divided equally (or proportionally based on contribution)
- Gifts: if tangible personal property comes to you in the form of a gift from a third party (i.e., your mom gifts you a $20,000 necklace or antique), you can make sure gifts are either kept separate or shared
Enforcing Tangible Personal Property in a Prenup
Tangible personal property can be enforced in a prenup just like any other provision. In order for a prenup to be enforceable, it must meet certain requirements, such as being in writing, notarized, and signed by both parties. What is required is determined by your state law.
If a couple were to divorce and one spouse refuses to abide by the prenup’s provisions regarding tangible personal property, the other spouse could take legal action to enforce the prenup. This would likely first involve negotiations with the spouse and if there was nothing that could be resolved, the next step would be going to court and seeking a court order to enforce the prenup.
Frequently Asked Questions (FAQs) about Tangible Personal Property in a Prenup
Q: Is it necessary to include tangible personal property in a prenup?
A: No, it’s not necessary, but it is often helpful to include any valuable tangible personal property to avoid any arguments over it in a divorce.
Q: Can tangible personal property be included in a postnuptial agreement?
A: Yes, tangible personal property can be included in a postnuptial agreement, which is signed during the marriage (a.k.a. After the wedding).
Q: Who determines the value of tangible personal property in a prenup?
A: The value of tangible personal property can be determined by appraisals or consulting with experts in the relevant field.
If you’re thinking about tying the knot, you might want to consider including your tangible personal property in your prenup (think: motorcycles, firearms, jewelry, artwork, coins, etc.). It’s a smart move if you want to avoid headaches down the road and make it easier to divide your assets if things don’t work out.
Blog By: HelloPrenup
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