Nobody ever gets married with the plan of separating. However, about half of the marriages in the United States end in divorce. Divorce is a challenging period for everyone involved. Besides separation’s psychological, emotional, and mental hardships, divorcing spouses must also consider financial issues, including asset protection.
If you are going through a divorce, our seasoned New York divorce attorneys can help you protect your assets during divorce proceedings. Keep reading to learn valuable tips for protecting your finances during a divorce.
Tips for Asset Protection in a Divorce
Divorce is one of the most common cases filed in the United States, and these proceedings are extremely contentious, emotionally charged, and psychologically demanding.
Divorcing partners are sometimes impulsive, mad, and act in bad faith. One spouse may try to avoid an equitable property division by destroying, hiding, or depleting marital assets. Protecting your assets requires you to take some precautions.
Here are some valuable tips.
Identify What Property You and Your Spouse Own
If you and your spouse are considering divorce, you should first make a detailed list of everything you own. Tabulate all your property, determine your net worth, and list your debts and liabilities.
Common types of assets include:
- Primary residence
- Investment pools
- Bank accounts
- Individual retirement accounts (IRAs) and 401(k) plans
- Retirement accounts
- Real Estate
- Personal property
- Business equity
All assets you owned before getting married are considered separate property. Any assets acquired by either spouse during the marriage are considered marital property.
Determine the Value of Your Assets
The court will consider each party’s pre- and post-marriage property and income when deciding how to divide marital assets and debts. A seasoned New York divorce lawyer can help you get an accurate valuation.
Divorcing couples have the additional responsibility of separating assets and property. Split up your finances and use individual accounts instead of joint accounts. Collect all relevant financial paperwork and maintain precise records of your financial transactions. Have these documents on hand if the judge needs to refer to them during the trial.
Understand New York Laws
Laws about divorce, property division, child custody, and spousal support are different depending on the state. You need a lawyer who understands the divorce and property division laws in New York.
In most cases, marital property must be fairly equally between the couple. A reputable New York divorce attorney can help you understand state laws and protect your assets.
A common mistake made by divorcing couples is to ignore tax laws and regulations. One spouse may receive taxable assets like a home, and the other will receive tax-free assets like a retirement account.
Update Your Beneficiaries
Next, you should update your will, life insurance, and retirement savings to reflect the new situation. While the state laws differ, a former spouse is not eligible to be a beneficiary in most cases.
Most people change their beneficiaries to a child or family member. Hire an estate planning attorney if you have a joint will so that each of you can have your own will.
Hire an Experienced Divorce Attorney
Hiring a divorce attorney with experience in asset protection is the best to safeguard your finances and possessions throughout a divorce. With the help of our expert knowledge, abilities, and experience, Douglas Family Law Group can guide you on how to safeguard your assets during a divorce.
Our legal team will help you navigate the divorce process, enabling you to protect your future and financial security.
Consider a Trust to Safeguard Your Assets
Equitable distribution laws classify property as marital or separate property during a divorce. Depending on the specifics of your situation and local laws, a trust set up to protect your assets may be considered community property or separate property.
You may consider one of the following types of trusts to protect your assets during your divorce:
- Domestic asset protection trust
- Spendthrift trust
- Irrevocable trust
- Asset protection trust
- Offshore trust
Should You Hide Assets Before or During Divorce?
Don’t try to hide any marital assets or cash before finalizing the divorce. Asset protection is legal, but that’s different from hiding them. Consult a divorce or asset-protect attorney to determine if asset protection is viable for you.
Prenuptial Agreements and Asset Protection
A prenuptial agreement is a binding contract between a couple that lays out the terms of how their assets and money would be split in the case of a divorce or death.
The property possessed by either party before the marriage might be safeguarded using a prenuptial agreement. Anything you own at the time of marriage is shared equally. To ensure your assets are protected in case of a divorce, you must provide clear and specific instructions in your prenuptial agreement.
A postnuptial agreement is an alternative to a prenuptial agreement, which serves the same fundamental purposes and provides similar protections. However, a postnuptial agreement is made after the wedding has taken place.
When one spouse’s financial situation or personal circumstances drastically shifts after the wedding, the couple may decide to revise their prenuptial agreement with a postnuptial agreement.
Are Inherited Assets Safe in Divorce Proceedings?
Inheritance is considered independent property in most states regardless of when it was received – before, during, or after marriage.
According to New York state laws, all property one spouse receives as an inheritance or gift from a third party during the marriage is not subject to equitable division. In a divorce, the couple’s assets will be divided equitably.
However, inheritances are not considered marital property and are not subject to division during divorce. This is not always the case, though. Some ex-spouses are spiteful enough to try to claim your inheritance. Since your ex-spouse may file a claim, you must take precautions to protect your assets.
Consult Our New York Divorce Attorneys Now!
At Douglas Family Law Group, our team of asset protection and divorce lawyers have the skills and experience needed to help protect your assets from a potential divorce. Our dedicated attorneys are determined to help clients protect their assets from divorce.
Call us today to schedule a confidential consultation.