How to Protect Assets From Divorce
Preparation and communication can help guarantee that assets go where you want them to go, should there be a divorce.
Anybody who makes a commitment to get married is probably not thinking about the relationship ending. Likewise, a lot of parents and grandparents do not consider the possibility of an heir’s marriage ending in their estate planning. However, the reality is that many marriages end that way—and placing safeguards in place to guarantee assets go where they need to in the future may even aid in easing tension in the present.
Below is how to help guarantee that your assets are going to go where you want them to, if the marriage should happen to be in trouble.
Protection Of Your Assets
Couples on the threshold of marriage should discuss how they are going to comingle accounts, share their assets, use each other’s income, and divide expenses. These discussions need to also include how each individual wants their separate and shared assets to transfer—either to each other, their children, or possibly other inheritors or causes.
If one or both of you are bringing considerable wealth to the marriage, these discussions should include talk of a prenuptial agreement. As you get past the quips and blemish that many relate with prenups, this agreement can benefit everyone involved. When both individuals are forthright about their objectives and concerns, the creation of the agreement should go without difficulty, and the process may help make clear your individual and shared wants.
For instance, think about a later-in-life marriage in which her daughter from a previous marriage is worried that their mother’s new spouse might have a claim on the family’s considerable assets. (This is a general concern, particularly if there’s a large difference in wealth between the 2 people that plan to wed.) To help alleviate her daughter’s concerns, she might recommend a prenuptial agreement in which each spouse waives all rights to the other’s assets if they were attained prior to the marriage—but which provides her new spouse with financial support, if they stay married for a minimal number of years or other stipulations are met.
You need to also think about how the agreement accounts into your all-around estate plan. If you want the conditions of the prenup to apply following death, for example, you could include a provision in which each spouse waives rights to their “elective share,” which is the widow’s contractual claim to a portion of the estate despite what is included a trust or will. Whatever conditions you decide, reexamine the agreement every couple of years to guarantee it still illustrates your situation and wishes.
Safeguarding Assets
Outside prenups, other ways to safeguard assets in the occurrence of divorce or death include:
Beneficiary naming’s: 401(k) retirement accounts are subject to special stipulations that safeguard a widow’s right to the assets. When you wish for the assets to pass to someone other than your spouse following your passing, your spouse is going to need to sign a waiver agreeing to a beneficiary other than themselves. Possessing a prenup or renaming your beneficiary is not sufficient—you are going to require a notarized agreement form for making the change.
Postnup agreements: If permitted in your state, you might be able to devise a binding agreement following you getting married that summarizes how you and your spouse divide up individual and shared assets, if you later decide to end the marriage.
Trusts: If arranged correctly, a trust can help safeguard assets in the occurrence of divorce, as long as all assets in the trust are handled as individual property and none of the allotments are mixed with marital assets. Trust laws are complicated and differ by state, so make sure to have a consultation with a trust lawyer far in advance to guarantee timely safeguarding of your assets.
Source:
- Schwab.com. (n.d.). How to protect assets from a divorce. Schwab Brokerage. https://www.schwab.com/learn/story/how-to-protect-assets-from-divorce
Collaborative Divorce And Child Custody
Discussions about child custody issues are always difficult during a divorce. While there is no way to make them easy or comfortable, you can find ways to work together. The collaborative divorce process helps with tools and professionals to make child custody and other decisions a little more manageable. By working together as a team, you’re able to make the decisions that are best for the kids.
Collaborative divorce can make these challenging times more manageable. It requires you to work with your spouse at a time when you have decided you need to go your separate ways. When it comes to child custody, though, you want to do all you can to make the right parenting decisions. Collaborative divorce can help create pathways for you to cooperate. If you live in the Phoenix/Scottsdale area and want to learn more about collaborative divorce, contact Ogborne Law today.
