Everyone knows that half of American marriages end in divorce, right?
Well, everyone is wrong.
In fact, divorce statistics have been much analyzed because of the complexity involved. If you want to go into the details – demographics, ratios, etc. – Divorce Source is a good place to start. Looking at reality, however, recent studies have shown that only around 20 to 25 percent of first-time marriages end up in divorce.
While that’s much lower than the commonly accepted figure of 50 percent, there is still no guarantee that your marriage won’t end up in divorce; and if this does happen, it is but wise to make sure that you protect your assets from divorce. After all, you’ve probably worked for them!
San Diego divorce lawyer Sandy Meade advises her clients to set measures in place even before the possibility of divorce comes up. This way, if bad blood does come into play, the losses will be curtailed. Additionally, if you are already in the process of a divorce, there are still ways to protect your assets. Here are the specific ways to protect your assets from divorce.
How to protect your assets from divorce
Have a prenuptial agreement.
A prenuptial agreement is one of the best ways to protect yourself financially from the get go. However, you will probably agree that this isn’t always the best way to start a marriage. Who goes into a relationship thinking that it will end up in separation? In many cases, partners may feel a sense of distrust or even betrayal if the topic of a prenuptial agreement is brought up.
If both partners have no issue with a prenup, though, then get in touch with a lawyer to help you set one up.
Enter the Domestic Asset Protection Trust or DAPT.
For those who don’t want to take the prenup route, an alternative is the DAPT. This irrevocable trust is normally used by well-to-do people to protect their assets from creditors, but it can also be used to protect your assets from a difficult divorce.
Simply put, since a DAPT is irrevocable, you don’t have control over the assets under it, but you can assign yourself as a beneficiary. Different states have different laws, so it is best to also get in touch with a lawyer who specializes in this.
Take an inventory of all your personal valuables.
These include jewelry, china, and other items. Whether you had them before you got married or during your marriage, if they belong to you, you ought to have an itemized list or catalog of those valuables.
If your valuables are gifts, make sure you have proof – best if it’s written. The same goes with inheritances.
Make copies of all relevant documents.
What are relevant documents? These include, but are not limited to:
- Tax returns – past three years at least
- Pension plans
- Insurance plans
- Savings accounts
- Business papers if you have a business together
If you have to leave your home, make sure you have all the copies with you.
Know how to handle shared property.
Shared property can be real estate as well as joint businesses and retirement plans. By making copies of relevant documents as previously mentioned, you can better deal with shared property. However, you might also need the services of a professional appraiser so you can have accurate information regarding the value of your assets.
While there are cases where two people cannot stay married, divorce is not something you would wish on any couple, especially a difficult one. However, if you want to safeguard yourself against the possibility, or you’re already dealing with it, you can take steps to ensure that you don’t get the short end of the stick.