When you go through a divorce, the most challenging and sometimes crippling result can be one or the other divorcee being nearly penniless. Divorce lawyers in Tulsa, OK will ruthlessly fight against you for the sake of themselves and your partner. Anything that is not otherwise protected could be at risk.
Here is a list of general assets that might come up during a divorce.
- Accounts used for investing
- Savings and checking accounts
- Life insurance policies
- Professional practices, business entities, interests in closely held corporations, or partnerships
- Retirement, pension, or executive compensation packages
- Furniture, real estate, and automobiles
- Trust funds
Even though many states are community property states requiring some form of split value to be added to items, it doesn’t mean that the value of the items split will be worth the same amount. For instance, you might have a rare coin collection that is valued above your house, meaning your spouse could fight you over the ownership of the house. Although this is just an example, and most coin collections will not fall under community property, you get the idea of how value and property are shared and divided in a divorce.
Why Protect Your Assets
As mentioned earlier, divorce can be a wealth-crippling loss. You might think that only those super-rich are genuinely affected by the ruthlessness of divorce splitting, but most middle-class Americans undergoing a divorce suffer more from the after-effects of divorce than any other. This is because those who have a lot of money typically have ways to protect it already implemented before they enter a marriage. Business accounts set up before your marriage or overseas assets are typically safe from marriage filings as it is seen as an independent investment.
The middle class lacks the investment capability to fund an elaborate overseas account or the foreign know-how that is required to understand how to properly set up and manage foreign business. Without proper planning, you are then up to the whims of the court to decide exactly where your assets will go.
The retirement account that you’ve been investing into for years or the house that you’ve poured all your money into thinking you would be there for the rest of your life are but a few of the most common and most crippling assets to split. You could be set back decades of hard work if you don’t have at least some plan when you think a divorce is filed.
How to Protect Your Assets
The best and most effective solution is putting your money in an offshore account and making an international LLC that will claim ownership of your assets. But while that is an effective solution, it’s really only suitable for those people with a lot of money in a bank account that would otherwise be at risk. So, if you are looking to protect your assets without opening an elaborate set of defenses, you should prepare other measures.
These are the general things you’ll want to prepare and start working on ideally before your divorce is filed.
- Compile all your account records over the last three years.
- Make copies of your bank, investment, and retirement accounts.
- Establish credit in your own name.
- If possible, get copies of your spouse’s account records.
- Get copies of your real estate records.
- Set up a separate bank account and maintain records on it. (You’ll have to share the information in court, but if it’s wages or independently obtained, it shouldn’t be an issue.)
- Make an inventory of personal property assets.
Once all this is done, and you have all the records that indicate what is and isn’t your property, you’ll be much better prepared in the negotiations that follow.
A few things to keep in mind is that the court can ask you for proof of personal credit and personal financial information. This means that if you open a new account and they know about it, you’ll have to show proof of where that money went. This also applies to offshore accounts, as significant assets disappearing is not something the court can overlook in the event of a divorce. To fully prepare, you’ll want to bring as much legal documentation that proves you are the primary contributor and draws a clear line on what your assets are.
It’s likely that you have heard of pre-nuptial or post-nuptial agreements, and you might have even signed one. Unfortunately, these agreements are not as air-tight as you might want to believe. Many state courts won’t even recognize the document, meaning it won’t protect any of your assets. It’s not useless to get a nuptial agreement, but you’ll need to be 100% certain that it will come into effect.
A prenup might become invalid if:
- The signing or execution of the agreement was done under duress or involuntary. If a spouse proves that they were forced to sign without choice, it might become invalid.
- If the agreement was unfair, oppressive, or financially unjustified, leaving one spouse with much more or much less than the other, the court is unlikely to enforce it completely.
- Leaving assets undisclosed at the time of execution. For instance, if bank accounts, property, or obligations existed without the signee knowing of such assets, they will immediately fall outside the agreement and be subject to splitting.
- If there were no witnesses or the document was left unproperly filled.
- Performing a restricted action. Prenups often come with them a number of restricted clauses that the parties both agree upon and vary between agreements. An infidelity clause on a prenup means that it immediately gets invalidated if the party was found to be cheating.
As you can see, there are a lot of potential problems that can come with relying on a prenup to protect your assets. It’s best if you can compile all relevant financial information and be as transparent as possible during negotiations to protect your assets. Although you might still be left with some splitting, creating a dividing line and showing what property is undoubtedly yours will prove beneficial to the inevitable negotiations. Contact us to schedule a consultation with a divorce lawyer in Tulsa, Oklahoma today.