How Can You Protect Your Assets in a Contested Divorce
It’s not common that couples plan for divorce when they plan their nuptials. Dividing assets is one of the most difficult aspects of divorce, especially when one party contests it. Divorces are often emotionally charged and lead one or both partners to make rash decisions that are not always financially sound. These decisions typically hurt both parties in the long run. Regardless of whether you petitioned for divorce or you are contesting the divorce, you need to take care to protect your assets. This short guide provides information about how you can protect your assets and ensure you get your fair share as you go through the divorce process.
Do Not Agree to Anything Until You Seek Legal Advice
Likely, you do not know the complete picture of your partner’s assets. If divorce has been on the horizon, one or both of you have likely started putting money aside, making purchases, and planning for the end. If you make an agreement with your partner before seeking legal counsel, there is a good chance you will need to renege on your agreement. This can infuse mistrust into the divorce process from day one.
Do Not Spy on Your Partner and Gather Evidence
If you know a divorce is imminent, or your spouse has filed for divorce, do not snoop around and gather information to help you in court. Digging into your spouse’s filing cabinet, searching their email, and opening bank statements can provide you with valuable evidence. However, courts will not admit evidence that you collected without your spouse’s permission. At some point in the divorce process, you and your spouse must fully disclose your finances. Your attorney will be able to find any monkey business through their analysis.
Do Not Move Your Assets
It might be tempting to give assets to a friend, family member, or other third-party to protect them. You might also consider moving assets into a trust or an offshore account. The courts will find out about this and likely interpret your actions as intentional deception. Not only will this look bad in any judge’s eyes, but he or she has the power to reverse transfers. You won’t gain from these actions, and you will have to include them in joint assets that must be divided. Additionally, a judge might be inclined to freeze all assets until your divorce is finalized, which could cause problems for you and your soon-to-be-ex.
It is a common myth that removing a spouse’s name from a joint asset will keep him or her away from that asset in the event of a divorce. California is a community property state, which means that the name on an asset has little meaning during a divorce. This becomes increasingly true as couples are married longer. Ultimately, the court has the authority to transfer assets in an equitable way across both parties unless a prenuptial agreement exists.
Stay in Your House
If you want to protect your right to the house you share with your spouse, you cannot move out during the divorce, no matter how tempting it may be. This is especially true if you have children. When one spouse leaves, the other often has an advantage and can argue they want the house or need it to care for children. The person remaining in the house sometimes has a more comfortable financial situation because they do not pay for additional housing. This does nothing to move closer to an agreement about buying out the other or selling the house and dividing the proceeds.
Do Not Cohabitate with a New Partner Before Your Divorce Is Finalized
If you live with a new partner before you go to court to finalize your divorce, it’s likely the judge will take into account your new partner’s financial situation. Your new partner could be a financial resource if you share a mortgage, rent, utilities, and/or other expenses. This means you have to share your partner’s financial details with the court, and it could impact spousal support.
Obtain a Valuation on Your Business if Applicable
If you started a business during your marriage, your spouse will likely have a stake in that business. Divorce can be difficult for family businesses and sometimes force liquidation or sale. However, divorce does not mean you have to close your doors. You need a current business valuation to give you a starting point for offering a buyout or selling your portion of the business to your partner. The size of the stake your spouse deserves in your business depends on the situation. If you started the business together and built it together, you can expect a 50/50 split. Other circumstances can tilt the scale in either direction. In any case, be open to the solution that lets your business continue to thrive, even if only one of you continues to run it.
Keep Your Divorce Settlement Private
If you and your spouse have business assets, it’s in your best interest to keep your agreement private. If you have a small business, nasty divorce proceedings could negatively impact your business, and you both lose. If you have a large business, especially one with stockholders, any media attention given to your divorce will likely tank your stock price. Once again, no one wins. It’s in your interest to reach an agreement with your lawyers or by mediation, so confidentiality is a mandatory part of the settlement agreement.
Contact an Experienced Divorce Attorney to Protect Your Assets During the Divorce Process
Divorce is difficult for everyone involved. Loss is inevitable, but it does not have to destroy you or your partner. Instead, get the help you need to protect your assets in a contested divorce, allowing you and your spouse to move on with your lives. Contact the skilled divorce attorneys at Pedrick Law Group, APC online, or at 818-325-3934 for a free consultation to discuss your particular circumstances and learn about the best path forward to protect your assets.