Protect Assets Before Marriage
You can protect assets such as a money, your car or home before you marry. Your assets — your separate property — can remain your separate legal assets unless you “commingle” with the separate property your new spouse.
Take Off Those Rose Colored Glasses – Protect Your Assets
If there was a 41 percent chance of winning the lottery, wouldn’t you stand in line to purchase as many tickets as possible? Yet with more than 41 percent of first marriages ending in divorce and more than 60 percent of second marriages ending in divorce, many do not make any effort to protect assets. The best time to protect assets is before you walk down the aisle. One well known form of protection for separate property assets is the Prenuptial Agreement. However, Prenuptial agreements are often contested and have clauses eliminating or limiting alimony which may not be valid if the spouse is injured or terminally ill. Therefore prior to marriage, other steps need to be taken to protect your assets.
5 Tips to Protect Assets Before Marriage
(1) – Do not commingle your prior to marriage and post marriage funds. Open new and separate savings and checking accounts to be used after marriage.
(2) – Be prepared to pay the mortgage with funds accumulated prior to marriage or from income produced by an asset acquired prior to marriage, if you and your new spouse are planning to move into a home purchased prior to marriage.
(3) – Consider placing separate property assets in an irrevocable trust. The trust will clearly define what assets were acquired prior to marriage. Also the settlor, the creator of the trust, gives control to a trustee, a third party. Consequently, creditors usually are prohibited from touching the assets of an irrevocable trust. When assets are divided in a divorce, third party creditors often seek any funds owed to them. But an irrevocable trust will not protect you from a spousal or child support claim or any federal or state tax claim. A revocable trust unlike the irrevocable trust, passes ownership when the settlor passes away. Unless there are provisions indicating what will happen in case of a divorce, the trust will be prohibited from being revoked or changed during the divorce. Only the court can determine whether the trust can be revoked or changed. This leaves open the possibility for the court to change a beneficiary to a third party creditor. However, placing your assets in a revocable trust will still clearly define which assets are your separate property in the event of a divorce.
(4) – Consider placing your assets in an offshore protection trust. This will ensure that creditors cannot touch the assets. The California courts have no jurisdiction regarding offshore trusts. Therefore, any court order allowing a creditor to have any part of the assets would have no effect.
(5) – Invest in pension plans, defined contribution plans, and in 401 (k)s. These funds cannot be touched by creditors unless the creditor is owed spousal or child support. On the other hand, distribution of IRA funds to creditors is at the discretion of the court.
Is Marriage In Your Plan?
If you are considering marriage and have considerable assets or inheritance, consider talking to Ryan Family Law Group to investigate creating a prenup or setting up finances such that inadvertent commingling does not put your separately owned assets at risk.
Is a Divorce on the Horizon?
If you own valuable assets, property or a business, your divorce filing will be more challenging. San Diego divorce attorney Paul Ryan will work closely with you and fight to get/keep your desired marital assets. He will help you organize your finances and make sure that you are set up for long-term financial success.
Ryan Family Law Group offers a free consultation to all potential San Diego divorce clients. We will go over your case details and determine if alternatives to divorce, such an annulment, are possible. You can schedule your free consultation by calling us 858-222-6600, texting us or by emailing us.