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Asset division, along with child custody, is one of the leading causes of stress and conflict in divorces. Understanding how to protect your assets during a divorce and taking the necessary steps as early as possible can reduce your stress and make your divorce go more smoothly.
An experienced divorce attorney can assist you with protecting your assets through various legal means, such as establishing pre and postnuptial agreements and trusts or uncovering hidden assets through an investigation.
Understanding Separate and Marital Property
The first step to protecting your assets in a divorce is to understand the difference between separate and marital property:
- Separate Property – This is the property that an individual brings into a marriage or receives through gifts, inheritance, or a personal injury payout during the marriage.
- Marital Property – This is the property shared by the spouses in a marriage, including most assets obtained during the marriage. Everything not included in separate property is considered marital property by default.
During a divorce, both parties retain ownership of their separate property, and their marital property is typically split 50/50 based on value. For example, if one spouse receives the house, the other spouse may receive a higher percentage of other assets to compensate for value disparity. However, large assets like houses can also be sold, with the spouses splitting the proceeds equally.
One important point to remember is that separate property can also become marital property if it’s commingled. If you bring significant assets into a marriage and then commingle your finances, it may be difficult to determine how much of those commingled assets should count as separate property during divorce.
Pre and Postnuptial Agreements
Pre and postnuptial agreements are one common way of protecting assets during a divorce. A prenuptial agreement is a document signed before marriage outlining what assets belong to each spouse and how to divide marital property in the event of a divorce. A postnuptial agreement is the same thing but signed after the marriage begins.
While these agreements must be in place before the divorce proceedings begin, if they are in place, they can be effective at protecting your assets.
Protecting Assets with Trusts
Another way to protect assets during a divorce is to place them in an irrevocable trust. When assets are in these trusts, a trustee takes legal responsibility for managing them. As long as you don’t commingle assets within the trust, they should remain separate property.
Trusts are a good idea if you have assets you want to protect for your heirs in the future. They are particularly common when individuals have children from prior marriages.
Hidden Asset Investigations
Sometimes, individuals take illegal steps to hide assets leading up to a divorce. It’s essential that every step you take to protect your assets is done by the books, with the help of an experienced attorney and financial professional.
However, if you believe your spouse is hiding assets, your attorney can also assist you with hiring a forensic accountant. Forensic accountants specialize in finding hidden assets, such as bank accounts that aren’t listed as separate or marital property.
Uncovering hidden assets during a divorce is vital for making sure the property division is equitable. If your spouse hides assets, those assets won’t count toward the marital property division, and your spouse will end up with more than their fair share. This also means you’ll end up with less than your fair share.
Contact Our Syracuse Divorce Attorneys
If you have concerns about protecting your assets during your Syracuse divorce, contact CDH Law PLLC for a consultation with an experienced divorce attorney. We’ll review your case, explain your options for protecting your assets, and help you determine if a hidden asset investigation may be necessary.