According to the Centers for Disease Control, the divorce rate in the United States is around 2.3 per 1,000 people. Divorce can still be challenging and emotionally taxing despite this relatively low rate.
Amidst the turmoil, it is important to consider how to protect your assets.
Gather financial records
Start by collecting all relevant financial documents. This includes bank statements, tax returns, property deeds, retirement accounts, investment accounts and other financial records. Having a clear picture of your financial situation before asking for a divorce is an excellent way to start.
Open separate accounts
Create individual bank and credit card accounts if you do not already have them. This separation of finances ensures you maintain control over your assets.
Document your assets
Make a comprehensive list of your assets and their estimated values. This list will serve as a reference during the divorce proceedings. Documenting valuable items with photographs or other proof is also good, especially if they are separate property.
Prenuptial or postnuptial agreements
If you have not divorced yet, explore the possibility of a prenuptial or postnuptial agreement. These legal documents can outline how you will divide your assets in the event of a divorce, offering you some protection.
Protect separate property
Assets acquired before the marriage or received as gifts or inheritances during the marriage are separate property in many jurisdictions. Ensure you can prove the separate nature of these assets with documentation.
Minimize joint debt
Prioritize paying off or reducing joint debts before initiating the divorce process. Joint debts are usually divided during a divorce, so reducing them can safeguard some of your assets.
Transparency is key
Be honest during divorce proceedings. Attempting to hide assets or provide false information can result in legal consequences that may harm your case.
Mediation can be a less adversarial and costly way to settle a divorce. A neutral mediator can help you and your spouse reach a mutually agreeable asset division arrangement.
Protecting your assets during a divorce involves careful planning and transparency. Remember that every divorce is unique, so making the best decisions for your specific situation is essential.