If you’re facing the breakup of a marriage, one of the most important things to think about is easy divorce terms and agreement.
However, separating your assets becomes a more difficult endeavor than it at first seems. The divorce process ends up leaving broken hearts, broken promises, and broken assets behind.
Read on to learn about how to protect your assets in a divorce.
Consult an Attorney for Spousal Support
When considering a divorce, it’s important to understand the implications for both parties. Consult an attorney for advice on what your legal rights and obligations are when it comes to spousal support. Experienced lawyers can provide advice on asset protection rights and give advice on what strategies you can use to safeguard your assets when dealing with a divorce.
Taking legal advice can protect your investments and other assets so they stay with you once the divorce is finalized. Additionally, taking legal advice can ensure that fair and equitable provisions are made so both parties have a clearer understanding of the process and their rights and obligations.
Gather Financial Documentation
Gathering financial documentation is a key part of protecting your assets in a divorce. This documentation can include:
- bank statements
- credit card statements
- paycheck stubs
- tax returns
You should collect a minimum of the past three years of all financial documents to provide an accurate overview of the financial position of both parties. Your documents should include all income from investments, bonuses, and salary. It is also important to document any side businesses, income from recreational activities, and other sources of income.
If you have assets of any kind, such as a home, car, or investments, verify the values of these items and document any changes. This documentation will provide an up-to-date financial snapshot of the marital estate, including income, assets, debts, and other financial obligations, which will help you protect your assets in your divorce.
Open Separate Accounts
To protect your assets in a divorce, you should avoid co-mingling assets and open separate accounts in your own name, with funds that have been yours since before the marriage. Make sure to set aside funds for your:
- retirement
- emergency savings
- any existing debts
By keeping your assets separate, each spouse is assured of his or her rightful share of marital property in the divorce proceedings. When opening separate accounts, make sure to keep all records and statements up to date. This will give you peace of mind that everything is accurately documented and help ensure that you are receiving your share of the marital assets.
Inventory Assets
To begin, gather records of ownership of all property, investments, businesses, and debts. Obtain bank records, insurance policies, deeds on vehicles, and any title records on real property. Once you have collected all documents, create a detailed list of all assets and their current estimated value.
Keep non-public, paper copies of documents in a secure place. In addition to tangible assets, compile lists of all digital assets owned. Connect accounts and online services to an email address that you can access with a partner or designate a colleague to have access.
This will guarantee secure access to all accounts for you and any legal counsel you may be working with. Finally, keep all asset inventory up to date as assets, accounts, and value change during the divorce process.
Consider Prenuptial or Post-nuptial Agreement
A prenuptial agreement is an important asset protection tool for couples who are considering marriage and for those who are already married. This type of agreement can specify how assets will be divided in the event of a divorce or death. It can also protect both assets owned prior to the marriage and assets that are acquired during the marriage.
Both parties must be represented by a divorce lawyer or other professional advisors. These professionals should have a full understanding of what the agreement specifies. If both parties agree to the prenuptial agreement, it can be signed and filed before the marriage.
A post-nuptial agreement is similar to a prenuptial agreement but signed and filed after the marriage already occurred. Post-nuptial agreements are often entered into when couples have disputes or are considering a separation or divorce.
There are specific legal requirements for post-nuptial agreements. Thus, both parties should be represented by legal or financial advisors. These agreements can be very effective in protecting assets in a divorce.
Limit Financial Changes
When it comes to protecting your assets in a divorce, one of the most important tips to remember is to limit financial changes. In the divorce process, as emotions can be charged, it is easy to make rash decisions and end up regretting them later.
It is important to carefully weigh the pros and cons of any financial change. Before making any decisions that could affect your assets, consult a financial adviser or divorce lawyer so you can make an informed decision.
Also, keep track of all account numbers and the assets you own, such as:
- stocks
- bonds
- art
Transferring any joint assets can muddy the waters, so try to avoid such actions if possible. By limiting financial changes, you can protect your assets from potential losses and ensure that you get the fairest deal in the divorce agreement.
Update Beneficiary Designations
You should make sure that your former spouse is not listed as a beneficiary on any asset with a beneficiary designation. This includes:
- life insurance policies
- pension/retirement plans
- bank and investment accounts
Additionally, you should update the contacts on all accounts so that no one in your former spouse’s family receives correspondence from your financial institution about your financial arrangement.
Learn How to Protect Your Assets in a Divorce
Now that you understand how to protect your assets in a divorce, put those tips into action to ensure that you have the best outcome for you and your family. Take the extra time to consult a professional and research the laws in your state if further guidance is needed. You can do this!
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