Where there are two people involved, divorce can be traumatic. This is even more so if you’re an heir and the marriage agreement does not cover your assets in case of separation or death – but what protection do we have? Our asset protection during divorce lawyer will discuss some steps that may help safeguard any property from loss during a break-up.
Find out what’s at stake.
- It’s crucial to know what you own and how much it is worth.
- You should also be familiar with your spouse’s assets and how much they are worth.
- Once you have this information, take a look at your finances and decide if you can afford to pay your spouse alimony in the event of divorce. If not, then the best move may be to keep all of your assets intact rather than risk losing them in a court battle over division of property.
Now that you know what assets could be at stake and whether or not you can retain possession of them after a divorce, think about what assets specifically you need to protect from potential loss during litigation. The following list contains some items that people commonly attempt (sometimes unsuccessfully) to protect:
- 401(k) plans
- Life insurance policies
- Brokerage accounts
- Real estate properties such as houses or condos owned jointly with others
- Automobiles owned jointly with others
- Bank accounts that belong solely to one party but show up on both names because one party deposited money into another account without changing its ownership status.
These are just some examples—you’ll need specific advice from an attorney who specializes in family law matters before making any decisions about which assets should remain out-of-reach in order for them not to become part of any settlement negotiations between spouses during divorce proceedings.*
Secure important documents.
Securing important documents is one of the most crucial steps in protecting your assets in divorce. If you have them, make sure you have copies of all of your important documents such as birth certificates and passports; marriage certificate; will; health care proxy (if applicable); durable power of attorney for financial decisions (if applicable); tax returns and other financial documentation; gift letters that detail gifts given over time to family members (e.g., wedding rings), etc.
Keep digital copies as well as hard copies, since many courts do not allow electronic files to be submitted as evidence unless they are printed out on paper first. Also keep copies of emails with financial information or any other potentially relevant data from your computer’s hard drive, cloud storage account or email inboxes that support your case against a spouse filing for divorce or property division after separation has occurred between spouses although this could be subject to change depending upon where the separation occurred if it happened before or during marriage because some states may require documentation showing separation before granting alimony/spousal support so consult an attorney before proceeding further if unsure about whether this applies in your situation.
Consider liquidating some of your investments.
You may have heard stories about people who have sold their investments at the bottom of the market. They then bought them back at higher prices and made a profit.
There’s a reason why we don’t hear about this happening all that often—it’s risky! If you sell your investments at the bottom, there’s no guarantee that they’ll bounce back up to where they were before. In fact, it could be years before your portfolio recovers from a big drop in value. And remember: You won’t be able to access those funds during this time period either.
If you’re considering selling some of your investments right now or after a divorce is finalized, think long and hard about whether or not it’s worth it—and if so, which ones should go first?
Be wary of spending sprees.
- Don’t make any major purchases.
- Don’t take out any loans or mortgages.
- Don’t invest in anything that could lose value, such as stocks, bonds and mutual funds.
- Don’t make any big changes to your lifestyle (for example, by moving into a smaller home).
- If you own property jointly with your spouse and continue to live there after the divorce is final, keep an eye on it for signs of vandalism or misuse (such as animals living in it).
Separate your debts.
- Separate your debts from your spouse’s debts.
- Keep your mortgage and other debts separate. If you have a joint mortgage with the person with whom you are divorcing, it may be wise to refinance into one that is solely in your name or into one that has both of your names on it (if this will help keep the value higher).
- Keep your credit cards separate. You do not want to be liable for any debt racked up by your ex-spouse before or during divorce proceedings; otherwise, if he or she fails to pay their bills on time, the creditor can come after you for payment! Make sure that any credit card accounts in both of their names are changed over so only one person is responsible for paying off any more charges with those cards.
Keep open lines of communication with your spouse.
If you’re married, it’s always worth keeping open lines of communication with your spouse. Discussing the financial situation with your spouse is a good idea and can help minimize any potential problems down the road. Talk about what assets you want to keep and what assets you want to sell. The same goes for debts: You should know how much each person owes before deciding on how to split them up.
Also talk about how you want to handle the divorce, especially if there are children involved in the equation (which there usually are). If possible, try not to let any bitterness get in the way of agreeing upon an equitable division of property—it’s best for everyone involved if this part goes smoothly!
Divorce is a stressful time where it’s easy to make costly financial mistakes, so it’s important to be aware of the potential pitfalls that lie ahead and plan accordingly.
Divorce is expensive—and not just emotionally. Without careful planning, you can find yourself in debt or lacking savings after years of marriage. Even if your spouse pays alimony or child support, these regular payments will not cover all of your expenses (such as housing and transportation), leaving you with little wiggle room should an emergency arise. It’s also possible that one spouse will have wasted or mismanaged their assets before divorce proceedings begin; this can leave both parties vulnerable unless they’ve taken steps to protect themselves beforehand.
When going through a divorce, it’s essential to know your rights and what steps can help protect any assets that could be at risk. The Law Office of Shamika has years of experience protecting various assets. Contact us today if this sounds like something which interests you.