The best ways to protect your separate property are by way of premarital and postmarital contracts, but those require the written agreement of both you and your spouse. There are things you can do on your own which will help keep your separate property financial assets separate.
1. Keep Your Records. Hang on to all those bank and brokerage statements, your income tax returns, relevant checks and deposit slips, real estate closing documents, probate records, everything associated with an asset you owned before marriage or acquired after marriage by gift or inheritance. Or scan them and store them electronically. 2. Be careful what you spend on. Don't spend the money you brought into the marriage on living expenses if you can avoid it. Once you spend your separate property cash it will be gone and can't be recovered. You can't "borrow" your premarital cash, spend it, and then replace it with money acquired during marriage. 3. Keep a separate account with only premarital assets. It's better not to commingle your premarital money into a joint account or even into an account in just your name into which you make deposits of money earned during marriage. It is not necessarily a fatal error, but it complicates the process of tracing back to your original premarital money. The basic principle of commingled money is that the community property portion is the first money to be spent, while your premarital money sinks to the bottom of the account and is not used until there are no community funds left. Although this principle gives your premarital money some protection, it also creates some problems. Your best bet is to keep a separate account in your name only, with only your premarital assets in it. 4. Sweep your account every month. To do this remove the earnings and income from your premarital assets into a completely separate account before those earnings and income are reinvested. Remember, income from separate property is community property. Do not roll income from a C.D. into a renewal C.D. Do not let cash dividends from stocks, mutual funds, money market accounts and other investments stay in the same account with your premarital assets. 5. Naming your accounts. You cannot create separate property by putting assets into an account entitled "[Your Name] Separate Property" and thereby make all assets you put into that account your separate property. You can call your accounts whatever you like but that will have no legal effect. As well, just because an account is in your name alone, rather than in the names of you and your spouse, that has no impact on the character of the property held in the account. Questions? We are here to help you. Contact us for more information on how we can protect your separate property.