9 Steps for Asset Protection Throughout the Marriage Lifecycle
Whether you’re just embarking on a journey into marriage or planning for a divorce, asset protection can be an essential consideration.
While modification of divorce orders is possible, planning to protect yourself proactively can help reduce how much factors such as spousal support or property division impact your assets.
Protecting Assets Before Marriage
Strong asset division starts before marriage. It’s not that you should go into a marriage expecting to get divorced. However, statistically, many people do face this end to a marriage, and by being honest and practical ahead of time, you can ensure that everyone involved has some level of financial security later.
1. Have Realistic and Honest Discussions
Try to set the excitement of romance and potential nuptials aside so you and your intended partner can have a practical and honest discussion about money matters. Talk about your financial goals, your existing assets, what you’re willing to share, and how your personal approaches to money might work together within a marriage. Be transparent and fair about the need to safeguard individual security while supporting partnership throughout the marriage.
2. Get a Prenup
If one or both parties to a potential marriage have substantial separate assets, a prenuptial agreement may be a good idea. This agreement details how those assets will be handled within the marriage and upon divorce if it occurs. This can be a way to ensure that both partners come out of a marriage with some assets without allowing the other person access to all of your separate assets.
3. Avoid Commingling Noncommunity Property
To keep property from before the marriage separate and ensure it is not deemed community property during or after a marriage, avoid putting it into joint accounts, trusts, or other types of ownership that give your spouse an equal right to the property. This is a level of financial and asset management you may want to discuss with an accountant or attorney, as how you manage the property can impact how it’s classified if you ever get divorced.
Protecting Assets During Marriage
Continue to take steps to protect your assets during marriage.
4. Have Cooperative But Not Wholly Commingled Financial Strategies
It may be a good idea to take an approach to marital and separate assets that is cooperative without being “all in.” For example, you might support each other and work in partnership to pay bills and reach financial goals. At the same time, you might have individual accounts where you keep assets from before the marriage and control them separately. This may be a good strategy for those who get married a bit later, as they may already have established careers and assets that have nothing to do with their spouse.
5. Understand What Is and Isn’t Community Property
If you’re concerned with asset protection, talk to a family law attorney about what is and isn’t considered community property in the state. That way, you can categorize and manage assets correctly.
6. Plan Proactively but Flexibly for the Future
Consider all of the outcomes that might be probable in the future, including scenarios where you are not together forever or through retirement. This may seem unromantic, but planning proactively and flexibly protects both of you and can be a way to care for each other.
Whether a divorce is in the future or one of you passes away, it’s essential to ensure each person can manage finances and live securely on their own.
Protecting Assets After a Marriage
If your marriage does end in divorce, there are some steps you can take to help protect assets after the fact.
7. Understand the Role of Alimony
Begin by understanding the role of alimony or spousal support, how it applies to your situation, and who might end up paying it. There are strategies to reduce alimony payments if you believe the other person is overreaching, and a family law attorney can help you protect your interests in such cases.
8. Invoke Your Prenup
Invoke all the agreements in any prenup you may have signed, using them to protect your interests and assets. While a strong prenup is a good protection, it’s important to realize that any contract can be disputed. If your ex is disputing the prenup or trying to gain access to assets you believe are protected by it, consider bringing in an attorney to help use your prenup and other legal means to protect your assets.
9. Seek Reimbursement for Contributing Separate Property to the Marriage
Consider whether you have contributed separate property to the marriage that may need to be reimbursed if you get divorced. For example, if you used money from savings that you had prior to marriage to buy a home when you first got married, those funds may be owed to you as part of any divorce settlement. This type of reimbursement is rarely cut-and-dry, and you may need to work with a lawyer to understand what you’re owed and how you might seek reimbursement via property division agreements.
Work With an Experienced Asset Protection Attorney
Asset protection before, during, and after marriage can be a complex and, in some cases, conflict-filled task. Get help from the Law Office of Patrick O’Kennedy in standing up for your rights and protecting your assets by calling 714-701-6356.
