By: Rudman Winchell Attorney Anthony Trask
More pragmatic (i.e. less romantic) clients sometimes ask whether they really need to go through what can be an awkward process of asking the love of their life to sign a prenuptial agreement prior to getting married in order to ensure their assets do not become marital property, subject to division in the event of a divorce. The short answer to this question is yes; in order to protect premarital assets from becoming part of a marital estate it is best to execute a prenuptial agreement that either itemizes or references some list of all your assets of any significant financial or sentimental value.
However, more often than not, for whatever reason, clients do not heed this advice and take the leap of faith into marriage without protecting themselves from what they hope will never happen … but often does. Under Maine law, the lack of a prenuptial agreement does not mean that everything you own prior to your marriage automatically becomes marital property after the marriage. In fact, you almost have to take affirmative steps to transform non-marital into marital assets.
Probably the most common way this happens is when one spouse transfers his or her sole ownership of a piece of real estate into joint ownership with his or her marital partner by way of a deed. The Maine Supreme Court has determined that when such a transfer is completed the law presumes the intent was to transfer non-marital property into marital property.
Sometimes the transfer is less deliberate. The Maine Supreme Court has also found that when substantial marital labor or marital funds have been invested in what was a non-marital asset, such as a parcel of land or a small business, any increase in the value of that non-marital asset could be considered marital property.
For example, assume you own a small home in need of some repair with a market value of $100,000. You are the sole owner of the home at the time you get married and you never transfer ownership into a joint tenancy with your partner. However, you and your spouse invest time and money earned during the marriage to make improvements to the home such that after just one year the market value increases to $150,000. If you were to divorce, the Family Court would most likely find that you are entitled to $100,000 as a pre-marital asset that is not part of the marital estate. However, the Court would also likely find the $50,000 increase in value is a marital asset and you and your spouse are both entitled to half of the increased value. You would almost certainly still be awarded the home in the divorce, however, you might be ordered to pay your spouse $25,000 for his or her share of the marital component of the property.
If you are contemplating marriage … or divorce … and would like to learn more about how Maine Family Courts determine what is non-marital and what becomes part of a marital estate, subject to being divided among parties, we encourage you to contact one of our experienced lawyers whose practice is focused on Family Law.