As discussed in our previous blog, Louisiana is a community property state, meaning that spouses own and owe everything equally. Income received or property acquired during the marriage is community property, regardless of who earned, acquired, or spent the assets. In divorce cases, Louisiana courts typically split the spouses’ community property 50-50, unless there are other provisions in place to protect the individual spouse’s finances and other assets.

A Paraphernality Agreement, also known as a Declaration of Paraphernality or Declaration of Reservation of Separate Fruits, is one of those protective provisions. A Paraphernality Agreement is a contract between spouses; it states that the spouse who owns separate property will also receive the proceeds from that separate property. This can include rent, royalties, dividends, interest, etc. So, for example, if a spouse owns a rental property prior to his or her marriage, and they have a Paraphernality Agreement in place, that spouse will receive the rental payments – the money is not community property. Without a Paraphernality Agreement in place, the proceeds from separate property become subject to community property laws.

It is important to consult with a knowledgeable and experienced attorney prior to your marriage, in order to review your planning options and have your desired protections in place before walking down the aisle. Wealth Planning Law Group can help safeguard your assets and property from divorces, lawsuits, and creditors by negotiating and drafting prenuptial planning agreements. If you are interested in our firm’s domestic (pre-nuptial) services, please contact us at (504) 608-3174 or info@lawealthplan.com.