Divorce-Proof Your Finances - TheStreet

Take it from Donald Trump: Get your financial house in order before you get married. Thanks to a prenuptial agreement, Marla Maples received just $2 million when she and The Donald divorced in 1999 -- a far cry from the $25 million Ivana received in 1992.

Even if you don't have the assets to justify a prenup, it's important to enter what you think will be the most blissful phase of your life with an eye to your financial future, just in case you end up joining the Trumps in divorce court. Here are a few steps you can take to protect your finances in the event of the unthinkable.

Ask questions

Before you enter into a business deal, you'd want to conduct due diligence on your potential partner. A marriage should be no different, given that the state considers it a legal partnership between two individuals. No matter how uncomfortable it makes you, ask your betrothed about his or her financial history. It's important to start the partnership off on the right foot. If you can't talk about money now, what makes you think you'll be more open to doing so after the wedding?

Specifically, take a look at each other's tax returns for the past five years, investment accounts, life-insurance policies, and a last will and testament if either of you has one. Check retirement accounts and other assets and be sure to ask about debts and liabilities.

You don't need to call off the wedding if you find out that your loved one is lousy with money. Getting everything out in the open can help avoid unpleasant surprises down the road and lay the groundwork to address any problems as a team. Be as open about your finances as you expect your spouse to be about his or hers.

And keep the conversation going: While one of you may take primary responsibility for household finances, be sure the other partner is well-informed about account balances and locations.

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Keep track of your stuff

During a divorce, assets are generally divided up by one of two methods: equitable distribution or community property. Equitable distribution is not the same as equal distribution; the term means that marital assets are divvied up based on a number of factors, including length of the marriage, age and health of the parties, lifestyles, needs and liabilities, and so on.

Community property, on the other hand, generally means that each spouse can claim half of the combined marital assets, regardless of whose name appears on the title. (Most states follow equitable distribution, but nine use community-property law including California, Nevada and Texas.)

If the idea of a judge deciding who gets what in a divorce doesn't have you reconsidering a prenup, your best bet is to keep close records of your finances. That means leaving a paper trail, since most states consider an inheritance or a gift from parents to an individual as separate assets. In addition, "premarital assets" -- things you owned before the wedding -- are often kept out of the pot to be divvied.

By keeping track of who got what from whom -- and why -- you can make things easier to sort out in the event you need to divide your stuff. And while it may come across as crude at the time, you'll appreciate the protection afforded by some cold, hard proof that the house in the Hamptons was your inheritance from your grandparents.

Maintain your own credit history

Dividing marital assets is tough enough without also giving up your credit history. Many couples share bank accounts or credit cards to facilitate paying bills and keep track of shared financial goals. But it's important to have at least one credit card and one bank account in your name only to develop or maintain an individual credit history.

This is especially true if you are a stay-at-home spouse who uses a credit card in your spouse's name. If your name doesn't appear on any accounts, a divorce could leave you with no credit history whatsoever. For this reason, you should also make sure that both of your names appear on all lines of credit and other loans.

The good news? Thinking about these matters before your wedding doesn't mean you're inevitably headed to divorce court. By discussing your finances in detail and taking a few steps to maintain proper records and credit, you can ultimately strengthen your joint financial outlook.

Peter McDougall is a freelance writer who lives in Freeport, Maine, with his wife and their dog.