Debunking Common Misconceptions: Why Common Misconceptions Could Cost You
Written By Rose Jamili, Associate
Many couples avoid prenuptial agreements, thinking they can protect their assets in other ways. However, misconceptions about property ownership and marriage laws often lead to unexpected legal battles. Here are the top 10 myths people believe when trying to bypass a prenup-and why they’re false.
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Keeping Bank Accounts in Your Name Means the Money is Yours
False!
Even if you keep a separate bank account in your name, any income earned during the marriage (such as your salary) is typically considered marital/community property-which means it can still be divided in a divorce.
How to truly protect assets:
A prenup can specify that certain accounts and earnings remain separate property.
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Putting Property in One Spouse’s Name Means It’s Theirs
False!
Just because a house, car, or investment is in your name doesn’t mean it’s separate property. If it was purchased or maintained with marital funds, it may be considered community property.
Why a prenup helps:
A prenup can define which assets remain separate, regardless of how they are titled.
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Gifts & Inheritances Are Always Separate Property
Not necessarily!
While gifts and inheritances received during marriage are often considered separate property, if you deposit them into a joint account or use them for marital expenses, they could be deemed community property.
How to protect them:
A prenup can explicitly state that gifts and inheritances will remain separate property.
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Moving Assets to a Trust Keeps Them Safe from Divorce
Not always!
Some people think transferring assets to a trust will protect them from division, but courts can still scrutinize the intent behind the trust and potentially award a spouse a portion of those assets.
The real solution:
A prenup can clearly state which assets belong to whom before marriage, avoiding trust-related loopholes.
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Earning More Than Your Spouse Means You Keep It All
Wrong!
Many people assume that if they are the primary earner, they will automatically keep most or all of their income in a divorce. However, in many states, income earned during the marriage is considered shared property.
A prenup can:
Set specific terms for income division and spousal support in case of divorce.
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If You Pay the Mortgage, the Home is Yours
Not necessarily!
If a home is bought before marriage but mortgage payments or renovations are made using joint funds, your spouse may be entitled to a portion of its value.
How a prenup helps:
It can confirm who retains ownership of real estate assets.
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Businesses Owned Before Marriage Stay Separate
Not always!
If a business increases in value during the marriage, a spouse may be entitled to a portion of that growth-especially if they contributed to it indirectly (e.g., supporting the household while you worked).
A prenup can:
Establish whether business growth or revenue will be considered marital or separate property.
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Debt Taken on By One Spouse Stays Their Responsibility
Not necessarily!
In some states, both spouses can be responsible for debts incurred during the marriage-even if only one person took out the loan or credit card.
Why a prenup matters:
It can specify that each spouse is responsible for their own pre-marital and personal debts.
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Cohabitation Agreements Offer the Same Protection as a Prenup
False!
Living together before marriage with a cohabitation agreement does not automatically protect assets after marriage. Once you marry, you are subject to marital property laws, unless a prenup says otherwise.
A prenup is legally binding in marriage, while a cohabitation agreement only applies before marriage.
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Verbal Agreements About Finances Hold Up in Court
Nope!
Even if you and your spouse verbally agree to keep finances separate, it won’t hold up in court without a written and signed agreement.
A prenup provides legal clarity and avoids “he said, she said” disputes in court.
Final Thought
If you want to truly protect your assets and avoid financial surprises in the event of a divorce, a prenup is the only reliable way to do so. Many people mistakenly believe they can bypass a prenup with informal arrangements, but courts will still apply state marital property laws-which may not work in your favor.
