As a general rule, a marriage contract defines the distribution of marital property in the event of divorce or death of a spouse. It is also possible to indicate which assets remain the separate assets of each spouse and what happens to the increase in the value of the separated assets. For example, Joe has an IRA worth $200,000 when he marries Barb. When they divorced six years later, the IRA was worth $500,000. In some states, $200,000 would be considered Joe`s separate property and $300,000 would be matrimonial property to be divided between Joe and Barb. A marriage contract can address any topic and deal with anything that is important to one or both spouses. Typical themes are: 2. Ownership: The parties can determine what is considered, if at all, as shared property subject to division. For example, couples often decide that property they acquired separately before marriage should remain separate property that, after marriage, is not subject to division. This reflection is especially important when one of the parties has inherited the property or has a large fortune. First, a brief overview of U.S. legislation.

In the co-owned states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin), all property acquired during the marriage is marital property and is divided equally between the spouses upon divorce. In equally distributed States, all property acquired during marriage is distributed equitably and equitably among the spouses. In many countries, increasing the value of a separated asset during marriage is a marital fortune. A marriage contract has many advantages. Some of these perks are: Barb has a home worth $250,000. Joe moves in after their wedding, and they use the house as their marital home. If they divorce, the house is worth $400,000. The court will most likely decide that Barb gave a gift to the family, classifying Barb`s house as a marital fortune and sharing all property. If Joe and Barb had entered into a marriage contract, they could have accepted that Joe`s IRA – including any appreciation during the marriage – would have remained his separate property and that Barb`s house – including any considerations – would have remained their separate property.