You did not get married thinking it was going to end in divorce. Sadly, the divorce rate in the country shows that divorce is all too common. Ending your marriage will bring with it mental, psychological, and emotional hardships. Still, there are also many financial matters you must consider, as well. Our family lawyers know how to protect your property from divorce proceedings, even if your case seems extremely complex. Below are just a few ways to protect your assets during divorce.

Identify Separate and Community Property

If you know that divorce is inevitable, you should start creating a complete list of property owned by you, your spouse, or jointly. Separate property includes assets either of you owned before the marriage, while community property is considered jointly owned by both parties. Common examples of community property include:

• Vehicles
• Shared investment accounts
• Bank accounts
• The marital home
• Retirement accounts
• Real estate, such as an investment property
• Personal property, including furniture
• Equity or proceeds from a business
• Pensions
• Cryptocurrency

Remember that when creating a list of inventory, you must include all debts and liabilities, as well.

Determine the Value of Your Assets

After you have written a comprehensive inventory of your separate and marital assets, you then need to determine the value of the property. When resolving property division issues, a judge will consider the income level of each spouse before and after the marriage, as well as the amount of separate and community property owned by the couple. To obtain the most accurate valuation, it is important to speak to a professional.

Open Separate Accounts

As soon as you know you are getting a divorce, you should also open separate accounts. Open a separate bank account, apply for a credit card that is in your name only, and separate your personal property as much as possible. If you have a joint bank account or credit card with your spouse, try to remove your name from it as soon as possible. Gather the financial documents for all separate and joint accounts and transactions, as your attorney and judge will want to review them.

Consider Tax Implications

Taxes are commonly overlooked in divorce cases, but they are one of the most important things to consider. While the tax law on alimony changed several years ago, there are other implications to think about. 

For example, the tax law regarding retirement accounts still applies, and so when dividing this property, you must know how it will affect you. You do not want to agree to accept a taxable retirement account while your spouse receives one that will not be impacted by taxes. It is best to work with an asset protection lawyer who can advise on the tax implications of dividing certain types of property.

Change Your Will

State law will automatically revoke your spouse as a beneficiary in your will after you get a divorce. Still, it is important to review your last will and testament to revoke your spouse on your own and to confirm that all previous versions of your will are invalid. You may also want to change certain terms so your children or other trusted individuals receive what your spouse once would have. Of course, if you have a joint will with your spouse, you need to ensure you have one of your own after divorce.

Use a Trust to Protect Assets

A trust is a legal document that can also protect assets during a divorce. To shield the trust assets from being subject to division, the document must be drafted prior to the marriage. Still, any assets placed within it at that point can be classified as separate, and you can retain them after your divorce is final.

There are many different types of trusts that can protect your assets during divorce. A Domestic Asset Protection Trust (DAPT) is an irrevocable trust that can provide the protection you need. Some individuals choose to open an offshore trust, as this provides the highest level of protection. You should always speak to an asset protection lawyer who can advise on the best trust to use for your situation.

Draft a Prenuptial or Postnuptial Agreement

Most couples should have a prenuptial agreement prior to getting married. A prenuptial agreement mainly outlines financial provisions in the event you get divorced. A prenup can outline which property is considered separate and therefore protected from being divided during divorce. A prenup can also stipulate terms surrounding alimony and how income will be used during the marriage.

A postnuptial agreement can include all of the same terms as a prenuptial agreement. The only difference between the two is that a postnuptial agreement is drafted after the marriage. There are many reasons couples draft postnuptial agreements. For example, you may start a business after you get married. To prevent it from being divided during a divorce, you can draft a postnuptial agreement that classifies it as separate property.

Keep Inheritances Separate

Under Texas law, inheritances and gifts are generally considered separate property and, therefore, will not be divided during the divorce process. There is a large caveat to the law, though. If you commingle the inheritance with marital property, it will no longer be considered separate. For example, you may place your inheritance in a joint bank account you hold with your spouse. There would then be no way to determine which funds are from the inheritance and which are marital property. The entire account would be divided according to the state’s community property laws.

Our Family Lawyers in Houston Can Protect Your Assets

At Integrity Law Group, PLLC, our Houston family lawyers have the knowledge about real estate and business law to protect what is most important to you in the event that you get a divorce. Call us now at (832) 280-9576, contact us online, or email us to schedule a consultation with one of our skilled attorneys and to learn more about how we can assist with your case.

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