How To Protect Assets From a Divorce
No one goes into marriage assuming that they’ll one day get divorced. However, despite peoples’ best intentions, many marriages end in a parting of ways. If this happens to you, it’s important to make sure you’re prepared. Otherwise, you could end up losing a lot of your assets that you’ve worked so hard to accrue (especially if the divorce is an ugly one). Here are a few things you can do now to protect your assets so you don’t lose them later in a divorce.
Make Copies of All Your Financial Accounts
It’s hard to protect your assets if you don’t know what you have. Start now to collect all your financial data. This is not only important for protecting your assets from divorce, but is also an essential part of any financial management strategy. Print out or make copies of statements for all your financial accounts (such as retirement, investment and bank accounts). You should also compile at least three years’ worth of financial records and keep the information in a safe place.
Make an Inventory of Your Personal Property Assets
In addition to your financial assets, you may also have personal property assets that you need to keep in mind. These can include collectibles, furniture, vehicles, boats or even intangible assets such as bonds and stocks. Make an inventory of all the personal property assets you have, and note whether or not any of your personal property assets are currently being used as collateral for any loans.
Set up a Land Trust
You may be able to protect real estate you acquired before your marriage by putting it in a land trust. This type of trust provides you with protection from losing the property in a divorce because you will not appear as the owner in any public records. The land trust is legally the owner of the real estate, and your name will not be publicly listed in association with the property.
Establish Credit in Your Own Name
When you’re married, it’s normal to open up credit accounts in both your and your spouse’s names. However, if you have any inkling that divorce may be in your future, it’s wise to establish credit in your own name. That way you won’t be stuck making payments on debts your ex-spouse has racked up under both of your names.
Don’t Incur Any New Debt With Your Spouse
If you follow my posts, you already know that I recommend you get out of debt as quickly as possible. This is especially important if there are any hints your spouse may serve you with divorce papers (or vice versa). It’s also important not to incur any new debt with your spouse. Not only will new debt tie you to your spouse and make the distribution of assets more challenging, but it will also take away money you will need for the divorce proceedings. Getting a divorce is an expensive process, so you should be saving money instead of spending it.
Open Personal Banking Accounts
In anticipation of an upcoming divorce, it’s important to open up your own checking and savings accounts that do not include your spouse’s name. To prevent your spouse from accusing you of trying to hide marital money, it’s important to make your spouse aware of your personal accounts and let him or her know how much money you are depositing into them.
These are all things you can do to protect your assets if you know divorce is coming. It’s best to follow all of these steps before divorce papers are served. But if the papers come by surprise, there are still things you can do to protect your assets. Talk to your lawyer to make sure everything you do is legal and won’t get you in trouble.