All There Is to Know About Asset Protection During a Divorce

Division of marital assets, including inheritance, businesses, and finances, can often lead to conflicts during a divorce. And you may find your divorce battle regarding asset division under the gavel. Therefore, it's imperative to pay careful attention to your assets in the course of your marriage. Laws regarding asset division will vary across states or territories. However, you may end up losing a significant amount of your assets during a divorce for many reasons. Therefore, it's imperative to know various options to protect your assets when going through a divorce. Fortunately, several options exist, and here are a few that are worth exploring.

Consider Prenups/Postnups

Prenups or prenuptial agreements are some of the most practical ways to protect your assets and avoid lengthy and costly legal battles in the event of a divorce. A prenup is a legal agreement you enter with your spouse, usually before marriage, that sets out how your assets will be divided if your marriage comes to an end. If you choose to enter such a contract after you are already married, it's often referred to as a post-nuptial agreement, and it works the same way as prenups.

Worth noting is that depending on the laws in your area, prenups or postnups may not always be automatically legally binding. That's because, generally, most courts will consider outcomes that are fair to both parties when ruling on divorce matters. However, many courts will hold you and your divorcing spouse to these agreements during your divorce case. Therefore, ensure you get the right legal advice when considering prenup or postnup agreements.

Document Your Transactions/Assets Properly

Having proper documentation of your finances, transactions and other assets can also go a long way in ensuring everyone keeps what's theirs during a divorce. Proper documentation may entail a lot of things, including your significant financial transactions, asset acquisition documents, inheritances received, gifts received individually and jointly as a couple, debts incurred jointly and individually, etc. Having this information may save you later if you find yourself in divorce proceedings. That's because proper documentation can help the courts separate assets pooled into marital property and those belonging to one party.

Think About Asset Separation

Separation of assets may seem counterintuitive when you're getting married. And while no one enters a marriage with the expectation that it will fail at some point, separating your assets from your spouse's may be beneficial down the line if you separate or divorce. You can separate your assets in many ways. For instance, if you owned property before your marriage, it would be best to maintain the deed in your name. Also, while you may want to have a joint bank account for your living expenses, consider opening a separate account for other expenses that may be personal.

Contact a family law firm to learn more.