Property Separation in a Prenup - A Complete Guide to Every Model

What Is Property Separation?

Property separation is the core arrangement in a prenup. Instead of the law's default - everything accumulated during marriage is split equally - the agreement stipulates that each partner keeps what's theirs. But "property separation" isn't one thing. There are three common models, each with its own advantages and drawbacks.

The Three Models

1. Full Separation

The rule: What's mine is mine. What's yours is yours. Always.

Every asset acquired, even during marriage, belongs to the partner who acquired it. Separate bank accounts. Separately registered assets.

Pros:

• Strongest property protection
• Maximum purchase tax savings
• Protection from partner's debts
• Ideal for business owners

Cons:

• Can create inequality - especially if one partner works less to raise children
• Requires separate management in practice (accounts, registrations)
• May feel "cold" to some couples

2. Full Sharing

The rule: Everything belongs to both. Like the legal default, but anchored in an agreement.

Why write an agreement that mirrors the default? Because you can add details the law doesn't define: how to divide, on what timeline, and what happens with specific assets.

Pros:

• Full sense of partnership
• Simple to manage - everything's shared
• Protects the financially "weaker" partner

Cons:

• No protection for pre-marriage assets
• No purchase tax savings
• No debt protection

3. Mixed Model (Most Common)

The rule: Some assets are separate, some are shared. You decide what and how.

The most common example:

• Primary residence - shared (or by investment percentage)
• Investment properties - separate (by who purchased)
• Pre-marriage savings - separate
• Savings accumulated during marriage - shared
• Inheritances - separate
• Business - separate (belongs to the owner)

Pros:

• Maximum flexibility - tailored exactly to your situation
• Allows purchase tax savings (if properties are separate)
• Maintains daily partnership

Cons:

• More complex to draft
• Requires specificity - every asset needs a clear definition

How to Choose?

Common Mistake: "Separation" Without Actual Separation

Tax authorities and courts check that the separation is genuine. If you signed full separation but:

• You have a joint bank account
• Both of you sign on every purchase
• You manage finances as one unit

Then the paper separation may not be accepted. This is one of the most common mistakes.

The Bottom Line

There's no "right" or "wrong" model. There's the model that fits you - your circumstances, your assets, and what feels right for both of you. The key is choosing consciously, not letting the law's default choose for you.

See how the process works →