7 Tips to Protect Your Separate Assets After Marriage
Separate Assets – If the assets were not protected prior to the marriage all is not lost. A Postnuptial Agreement can define separate property earnings and assets as well as marital earnings and assets. Earnings and assets acquired prior to marriage and an inheritance are separate property. Earnings and assets acquired after marriage are community property. However, a Postnuptial Agreement similar to a Prenuptial agreement is often challenged at the time of a divorce. Therefore, other steps to protect your separate property assets after marriage must and can still be taken.
(1) – If funds have been commingled such that separate and community funds are in the same account, the burden is on the party claiming some part of the funds are separate property to trace the source of the asset.
Locate bank statements and copies of checks showing the withdrawal of the funds from the separate property account and the deposit of the funds to the community property account. Keep these documents in a safe place as banks do not keep records beyond 5 years.
(2) – Place any documents related to an inheritance in a safe place. In addition, create a separate bank account for any inherited funds. All inherited funds or assets are separate property.
(3) – Do not use any community funds to maintain or remodel any separate real property. When community funds are used to maintain or remodel a separate property a community interest is being created.
(4) – Do not use any community funds to maintain or operate a separate property business. When community funds are used to maintain or operate a separate property business a community interest is being created.
(5) – Do not use any community funds to pay the mortgage of your separate property residence. This may create what is called a Moore Marsden interest. This interest may be very significant if the property value increases.
(6) – Create an irrevocable or offshore trust for your separate property interests, if you have not already done so prior to marriage.
(7) – Continue to invest in your pension, defined contribution plans, and 401 (k)s. In the event of divorce, a Qualified Domestic Relations Order will be prepared that will divide the parties’ separate property and community property interests.
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 Divorce In Your Future?
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.