Protecting Your Assets in a Divorce – Tips From a Seasoned Divorce Lawyer
We can help you avoid probate, shield your assets from creditors and protect your family’s wealth for generations. We offer comprehensive asset protection strategies to shield your property from future litigation, creditor claims, and Government agency action.
We also help you separate your personal and business assets using LLCs and trusts. This can help you avoid a divorce or other legal battle, as well as a tax audit.
Prenuptial/Postnuptial Agreements
A prenuptial or postnuptial agreement is a legal document that determines how assets will be distributed during separation or divorce. These agreements cover finances, debt, individual inheritances, joint purchases, and more.
While prenups are often stigmatized, they are an effective way to protect your assets during a divorce. They can also help you avoid expensive litigation in the future.
A well-drafted prenuptial or postnuptial can help couples from all walks of life protect their assets. We can ask for some expert advice from a Rosenburg divorce lawyer. The main benefit is that it can clearly define separate and marital property. This can prevent disputes over things like the antique hope chest inherited by one spouse from their grandmother or whether a house purchased during marriage is considered community property. These documents can also help heirs preserve non-marital assets and pass them on to beneficiaries outside the spouse. This can save heirs from going through the court to obtain their inheritance.
Trusts
A trust is a legal tool allowing you to transfer property ownership to another person while living. A trust can offer advantages that a will cannot, including avoiding probate, minimizing the chance for contested estates, and protecting assets from creditors.
An asset protection trust (APT) is a type of trust that’s designed to protect your assets from creditors, lawsuits, and judgments. APTs work by severing your connection to the property in the trust, meaning it’s no longer yours and can’t be used by your creditor.
Domestic APTs are only available in 17 states, but a good estate planning attorney can help you establish one. A trust can provide long-term benefits, whether you have a lot of money or just a few valuable items.
Retitling
Many people are surprised to learn that investment portfolios, baseball memorabilia, and retirement funds are subject to equitable distribution in divorce. This includes assets that may be titled in a single person’s name or jointly with a spouse.
Assets are distributed based on how they’re titled and whether or not they require probate. It’s essential that people understand titling and how it can impact their estate plans.
Often, people will retitle their property as part of their estate planning.
Gifting Assets
If a prenup or postnuptial agreement isn’t in the cards for you, there are still steps you can take to protect your assets in the event of a divorce. This includes ensuring that all financial assets, including bank accounts, investments, and retirement accounts, are owned solely by you. Additionally, it is advisable to open separate spending accounts and obtain life insurance in your name only.
Gifting assets to your children can also offer some protection. However, it’s essential to do so carefully, as lifetime gifting has tax implications. Generally speaking, cash and assets with low appreciation are better for gifts than highly appreciated assets that will be subject to estate taxes upon your death.
It’s also crucial to keep detailed records of all assets and debts, those held in your name and those you share with your spouse. Good record-keeping will make it easier to prove the legitimacy of any claims you may have during a divorce.
