In many divorces, the primary focus isn’t who did what or which party sacrificed the most. Instead, it boils down to one thing: Assets.
Even if your divorce is about more than assets, you need to know how to protect what you have – and avoid losing things to your spouse when you don’t have to. That’s not to say that you shouldn’t collaborate or work with your ex to have a successful divorce. You absolutely should… but you should also protect your assets from divorce.
7 Tips for Protecting Assets From Divorce
Protecting your assets from divorce can help you set yourself up for a successful future – a post-divorce life that isn’t unnecessarily difficult.
These seven tips can help protect your assets from divorce:
- Stop fighting and negotiate
- Put money aside
- Keep track of money you brought into the marriage
- Don’t give up pension and retirement accounts
- Don’t rely on permanent spousal maintenance (alimony)
- Ask for health benefits
- Work with a tax professional immediately
1. Stop Fighting and Negotiate
Fighting with your spouse isn’t likely to get you a successful outcome. Instead, it leads to a more time-consuming divorce. The more you fight, the angrier you’ll both become – and nobody is going to budge. You’ll have to go to court to duke it out, and you’ll force the judge to make important decisions for you.
All of this costs money – and in the vast majority of cases, it’s money you don’t have to spend.
2. Put Money Aside
If your spouse blindsided you with news of the divorce, he or she has probably already stashed away enough cash to last a while. You haven’t had the same luxury, but it’s not too late. It’s always smart to tuck away a little separate cash during a marriage; however, if you didn’t, see if you have room in your budget to set aside 10 percent of what you bring in as an emergency stockpile. (Even 5 percent makes a difference over time, so do what you can!)
3. Keep Track of Money You Brought Into the Marriage
If you didn’t sign a prenuptial agreement, that’s okay. Focus on what you brought into the marriage or what you received during the marriage that’s only yours. That can include inheritances, property you owned, and personal savings you had before you married. Did your money finance a family business or your ex-spouse’s education? Let your lawyer know what happened to the cash and other assets you contributed while you were married so she can help divide it accurately.
4. Don’t Give Up Pension and Retirement Accounts
During most divorces, individual retirement accounts (IRAs) and pensions are on the chopping block for division. However, they don’t always have to be divided in half. Your Stockton divorce attorney will give you case-specific advice on IRAs and pensions.
5. Don’t Rely on Permanent Spousal Maintenance
In some cases, you can expect to receive spousal maintenance from your ex. What you can’t expect is that it will be a certain amount or last for a certain period of time – at least until the judge has ruled. You can’t count on permanent spousal maintenance as part of your future budgeting. In fact, you may not want to count on it at all; in many cases, alimony isn’t enough to support your current standard of living.
Typically, judges expect people who can go out and earn a living to do exactly that. That means your spousal maintenance isn’t likely to last as long as you want it to – and the judge might award you less than you want, too.
6. Ask for Health Benefits
Health insurance can get very expensive, very quickly. If your spouse carried you on his or her insurance during your marriage, ask if you can stay on the plan (even if you have to pay for it). Sometimes, ex-spouses can stay on a plan for up to 3 years. The catch is that you have to apply within 60 days of your divorce to get these benefits.
7. Work With a Tax Professional and a Financial Planner Immediately
While it’s one thing to create your own budget and try to figure out how much money you’ll need to live on as a newly single person, it’s another to have an accurate picture of what your financial future holds. For most people, it makes sense to work with a financial planner who can give you that picture. The same is true with taxes; a tax professional can tell you how much a proposed settlement will be worth after taxes – and how you can deduct alimony payments or take advantage of childcare tax credits to save money in the future.
Do You Need to Talk to a Divorce Lawyer About Protecting Your Assets From Divorce?
If you’re divorcing, we can help. Call us right away at 209-910-9865 or get in touch with a Stockton divorce attorney online to schedule a consultation today.