A significant concern for many divorcing couples is how their assets will be divided fairly amongst each partner. Coupled with the emotions of ending their marriage and the responsibilities of finding solutions to their child custody and child support issues, they are also worried about how to split up assets equally.
Protect Your Assets During Divorce
If you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin) you are not subject to equitable distribution law as in other states. Each spouse is entitled to community property. However, with the guidance of an experienced legal team and a little preparation, it is possible to protect assets for equal distribution. The attorneys at Balekian Hayes, PLLC, have tapped into their many years of experience practicing family law to offer tips that will help people protect assets during a divorce.
Start by examining current assets that may be affected by a divorce.
Examples of marital property or what is known in some states as community property that can be divided during divorce include bank accounts investment accounts, retirement accounts, real estate, vehicles, high-value items such as furniture, electronics, and other household items, complex assets, businesses, and intellectual property.
Determine if the property is separate or marital.
Assets need to be distributed fairly to each spouse. It is essential, to begin with determining which property is marital and which is separate. Whether or not something is marital or separate property is decided at the time the asset is acquired. Community property is generally divided between spouses, while any separate property remains with its specific spouse.
Examples of separate property include any property owned by one spouse before marriage, an inheritance received by one partner, gifts from third parties to one partner, and payment received from a personal injury lawsuit.
Marital assets will generally be divided equally between partners. The court will often consider many factors in determining how they will be divided, including the length of the marriage, the standard of living during the marriage, age, physical and emotional health of each spouse, earning potential and income of each spouse, income or property brought into the marriage by each spouse, the financial situation of each spouse after divorce, financial needs of custodial parents to care for children.
Gather records and document items.
Begin gathering records for all jointly held accounts, properties, and assets. Documentation is essential to determine your fair share of assets and can help prevent your spouse from hiding any assets. It is necessary to make copies of all tax returns, loan applications, wills, trusts, financial statements, banking information, brokerage statements, loan documents, credit card statements, deeds to real property, car registrations, insurance inventories, and insurance policies. Don’t forget to make copies of records that can also trace and verify your separate property, such as an inheritance or family gifts.
Create an inventory of household goods and their value, including household electronics like TVs, computers, and big items like your furniture. Values can be documented with receipts to show how much was paid for an item or by using an appraiser.
Consult with an attorney.
If you and your spouse are having difficulty arriving at a fair settlement agreement, you need help from a qualified family lawyer. Many couples have a prenuptial or postnuptial agreement in place, in which they have decided ahead of time how to divide their community property. This can make things much easier during divorce, but sometimes a prenup or postnup can be disputed.