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Exchanging Tax Returns With a Prenup

By May 23, 2018January 3rd, 2022Tax Planning

For those clients who will enter into a prenuptial agreement before their marriage, I always recommend that they exchange three years of tax returns (personal and business) before their agreement is signed. The exchange of tax returns is in addition to preparing a detailed financial disclosure schedule that will be exchanged with the other party.

Why are the tax returns important? Because many times, as part of a prenuptial agreement, people agree (or are asked to agree) to waive their rights to income earned during the marriage, which, in the absence of an agreement, would be marital property. This waiver of rights to income during the marriage can often be the single most significant waiver someone makes in a prenup. Knowing what each spouse’s income has been is the best way to assess what you are agreeing to give up. Additionally, if it becomes clear that one party has not filed a return, the other party would do well to take caution before proceeding further .

If you are thinking about having a prenuptial agreement, or if you believe your fiancé is going to ask for one, do not delay in seeing an attorney experienced in the preparation of these agreements. The attorneys at Paule, Camazine & Blumenthal, P.C. can assist you with what is clearly something that is not very romantic but often necessary and advisable in today’s world.

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