Protecting Your Assets: A Guide to Property Division in Divorce
In New York, all assets accumulated during a marriage are considered marital property unless they are inheritances, gifts, or money received as compensation for a lawsuit. This is why keeping a strict inventory of separate property, backed by records and receipts, is crucial.
Protecting assets from creditors by re-titling them and avoiding illegal conveyances is possible, but this is best done before marriage.
Hire an Attorney
Your assets matter whether you are a high-income earner or a stay-at-home parent. If you have concerns that your marriage may eventually end in divorce, it’s wise to protect your assets before it’s too late. One of the best ways to do this is by entering into a pre- or postnuptial agreement. A divorce attorney Tampa can help you understand how your property would be divided if the marriage ends and help you put assets into trusts to separate them.
It is also a good idea to start compiling copies of all your family’s financial records, including bank statements, tax returns, and pay stubs. This is especially important if you suspect your spouse is trying to hide assets. In addition, an attorney can review any asset division agreement before it is finalized to ensure it is fair and equitable.
Separate Your Personal and Business Assets
Divorce can be emotionally and financially taxing. During divorce, assets may be split between both parties and are subject to equitable distribution laws. Protecting your personal and business assets before a divorce is essential.
You can keep separate accounts for your personal and business finances. Additionally, you should avoid commingling your personal and business assets with marital property. Similarly, you should remove your soon-to-be ex as an authorized user on their credit card and loan accounts.
Another way to protect your assets is to sign a prenuptial agreement before getting married or a postnuptial deal after marriage. This allows you to dictate which assets and income are considered separate property and prevents them from being categorized as part of the marital estate to be divided in a divorce. Lastly, you can put your assets into an offshore asset protection trust. While these strategies are less effective than pre or postnuptial agreements, they can still help you protect your personal and business assets.
Don’t Commingle Your Assets
One of the biggest concerns for those who plan to get divorced is that they may lose what was originally their separate property during the property division stage of a divorce. This is especially true if the couple commingles their particular property with their marital assets.
For example, suppose you have an inheritance and deposit that money into a savings account you share with your spouse. In that case, that action can change the property from your own to marital property. The same is true if you make active investments shared with your spouse, such as home improvements.
Avoid commingling your assets by keeping accurate records of what you bring to the marriage and separating your property into as many different accounts as possible. Consider working with an experienced divorce financial professional to help you develop strategies to protect your wealth. A prenuptial agreement is a good option for people concerned about losing their property.
Don’t Hide Your Assets
People try to hide assets in divorce for a variety of reasons. They may try to avoid paying spousal or child support, for example. This could result in financial hardship for the spouse. Others may avoid taking their business or property by their spouse.
One common way that people try to hide assets is to transfer money, stock, or investments to family members and friends in anticipation of a divorce. This practice is called “gifting.” People also often pay salaries to fictional workers to minimize the amount of their marital estate that will be divided by the court.
It’s important to know that courts can evaluate and uncover hidden assets, especially during discovery. The best way to protect your assets is to stay organized, keep records of transactions, and be transparent with your spouse throughout the divorce process. If you are worried your spouse is hiding assets, consult an experienced attorney immediately to discuss your concerns.