Protecting Your Assets in a Divorce – Tips From Leading Family Law Firms

While divorce rates are at a 50-year low, many still fear that a divorce will dismantle their finances and destroy businesses they have worked hard to build. Efficient asset protection strategies can help prevent this from happening.

The key is to take proactive measures before or during a marriage. Below are some tips to get you started:

Know Your Assets

Knowing your assets is the first step in protecting them in a divorce. This includes your separate property and assets that may be considered marital property, such as 401k accounts and pensions. It is important to know what you own and where it is to identify more of your retirement savings as separate property truly.

Combining finances after marriage can make paying bills and saving easier and lead to commingling assets that may become difficult to protect in a divorce. If you plan on divorcing, separating your financial assets into individual accounts is essential, and you should always notify your spouse of any changes you make.

An experienced family law attorney like the professionals at https://bc-llp.com/ can help you develop an asset protection strategy customized to your situation and objectives. Your lawyer will look at your case objectively, understand that court discretion is often involved in a divorce judgment, and provide you with options to protect your assets.

Create a Prenuptial or Postnuptial Agreement

Divorce can be emotionally and financially taxing for both parties. To avoid potential financial strains, making a plan that protects assets from the start is important.

A prenuptial or postnuptial agreement is an excellent way to detail a couple’s assets and how they would like them distributed in the event of a divorce. This is especially useful when one party has significant assets they want to keep separate.

Real estate acquired during a marriage is generally considered marital property and subject to equitable distribution. Still, a prenuptial can allow couples to ring-fence real estate they own individually as separate property. The legal process for enforcing a prenup requires full disclosure by both parties, so this should be discussed openly before the marriage begins.

Similarly, protecting retirement savings is important. If you are worried about losing your 401(k) or other retirement funds in the event of a divorce, speak with an experienced family law attorney.

Keep Your Assets in Your Name

Many individuals are concerned about how divorce will impact their retirement assets. The good news is that you can take steps to protect these assets. First, be sure to diversify your investments. This will reduce risk and help you avoid major losses.

Another important step is to keep your personal and marital assets separate. This is especially important if you live in a community property state. Moving any separate assets into a trust before filing for divorce is also a good idea if you do not have a prenuptial or postnuptial agreement.

However, hiding assets and anticipating a divorce may hurt you in the long run. Hiding money could escalate divorce proceedings, increase legal fees, and even cause a loss of credibility with the judge. For this reason, it is best to consult with an experienced family law attorney before taking any drastic measures.

Hire an Attorney

With divorce rates at 50-year lows, it is important to be prepared for what may lie ahead. By taking some simple steps, you can protect your assets from the possibility of a future divorce.

The first step in protecting assets from a potential divorce is to understand what you own and how it is titled. Then you can take steps to safeguard those assets, whether entering a prenuptial or postnuptial agreement before marriage or keeping certain assets in a trust during the marriage.

Another important step is to keep your finances separate from your spouse’s. That may mean keeping real estate titled in your name or never commingling funds from your retirement account with those from a joint bank account.

Lastly, it would help if you never sold or transferred any property that is not marital without consulting with your family law attorney.