Asset Protection
There are two principal ways to protect your assets in a divorce case: premarital asset protection and post-marital asset protection.
Pre-Marital Asset Protection: Prenuptial Agreements
Premarital asset protection principally involves the use of a prenuptial agreement (also known as a premarital or ante nuptial agreement). A prenuptial agreement is a contract entered into between parties engaged to be married that provides in advance for the distribution of property, alimony and other monetary issues in the event of a divorce. Typically, prenuptial agreements do not control issues like child custody, child support or visitation.
The subject of prenuptial agreements is very complicated and varies dramatically from state to state. Generally speaking, however, most states will enforce prenuptial agreements if they comply with the laws governing contracts: in other words, if the parties voluntarily enter into a prenuptial agreement that is not unfairly one-sided, no fraud, duress or coercion is used, and the parties exchange all relevant information regarding their assets, then the agreement will generally be upheld by the court. However, if the provisions made for the wife are disproportionate to the extent and value of the husband's estate, the presumption is raised that the husband intentionally concealed his assets, and the burden shifts to the husband to show that the wife had full knowledge of the husband's property.
Whether you are the party seeking to have your fiancé sign a prenuptial agreement, or you are asked to sign one by your soon-to-be spouse, it is important that both of you have separate legal counsel advising you on the agreement. If only one attorney represents both parties, and the agreement is later challenged, the party challenging the agreement may be able to get out of it by arguing that the attorney who prepared it had a conflict of interest, or that the use of only one attorney constituted coercion.
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Post-martial asset protection
Even if you do not have a prenuptial agreement, there are some ways to protect your assets once divorce becomes a possibility in your life, whether you are the spouse seeking the divorce or the unwilling party to it. This does not mean stripping the family home and bank accounts clean. In fact, this kind of conduct can be considered fraudulent (and even criminal in some states), and if you overreach in trying to protect your assets, you could find yourself in hot water. The scope of your post-marital asset protection plan depends upon your role in the marriage. If you are a homemaker without a paying job or regular source of income, your goal will to be to make sure that you keep all of your separate property, to make sure that your spouse discloses all of his or her assets and income, and that all property that is joint or marital property is identified and preserved. To do this, you should gather evidence as to all of your spouse's property, your property, and your joint property (even if you are not contemplating divorce, it's always a good idea to have an accurate record of your assets, and you never know when a divorce will rear its head).
In other words, make copies of all financial records you are aware of: tax returns, brokerage and bank account statements, real estate records, insurance policies, your spouse's business records, and all other property records. You should even videotape all of your property and keep the tape in a safe place, preferably away from your home. This will help support your claim to the property if your spouse attempts to take it away. You may even want to hire an appraiser if the value of the property in question is significant.
Also, you may want to consider opening up a checking account and credit card in your own name. This can help you establish credit after your divorce. If you are a spouse with a large income, a great deal of separate assets, or a business, your goal will be to keep as much of your property and income separate from your marital property so it won't be distributed to your spouse. In order to do this, you will need to keep detailed business and other records showing that the property was never a part of your marital estate.
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Hiding Assets
Of course, asset protection can be a risky business; if you willfully hide assets from your spouse, or you dispose or transfer property to avoid your spouse's claims, you could not only lose the protection for your property, or even find yourself facing criminal charges. If you're thinking about asset protection, you need to speak to a qualified divorce lawyer so you can be sure that your asset protection plan will be legal and effective.
At TotalDivorce.com, we make it easy for you to speak with a divorce attorney. Simply call our number, 1 (877) 349-1310, and you will be connected with a participating divorce attorney in your area who will schedule an initial consultation with you.