Protecting assets in divorce is usually a major concern of affluent individuals. We understand that you also don’t want to completely lose what you have worked so hard to gain. So how do you protect your assets in a divorce?
HAVE A PRENUP OR POSTNUP IN PLACE
If you entered into an enforceable prenuptial agreement or postnuptial agreement during marriage, the assets designated in it are protected. But not every agreement is enforceable. They can be challenged and voided if one of the parties proves they were under duress when signing, there wasn’t full financial disclosure when the agreement was made, or errors in executing the contract. Or, the provisions of your prenup are written in such a way that it is subject to varying interpretations. Your New Jersey high-net-worth divorce lawyer can review your agreement, stand up for its validity, and work to secure your assets that are protected by it.
KEEP YOUR SEPARATE PROPERTY SEPARATE
Generally, only marital property is subject to being divided in divorce. In general terms, marital property is property acquired during marriage. Assets you had before marriage are typically considered separate property. Property protected by a valid prenup or postnup and inheritances or gifts to one spouse are also separate property. But sometimes people make the mistake of mixing what was separate property with marital assets, potentially turning them into marital property.
Some examples:
- If you owned a home before marriage that became the family home and you put your spouse on the title or if your spouse contributed to paying the mortgage or making significant improvements, that house may well be marital property.
- If you mingled money from an inheritance that went solely to you into a joint bank account, that account may be marital property.
- If you owned your business before marriage, but your spouse helped it grow or helped finance aspects of it, part or all of it could be considered marital property.
Whether an asset is separate or marital property is not cut and dry. Everything is on the table at the beginning of divorce. It is up to divorcing spouses to show that something is their asset alone, especially in cases where the other spouse is challenging one spouse.
To help protect your separate property from becoming part of the marital property pool, gather all the paperwork related to it. Your lawyer will use this in negotiations or in seeking to establish why an asset should be yours alone.
TRY TO SETTLE ASSET DIVISION BETWEEN YOURSELVES
There are two basic types of divorce: uncontested and contested. In an uncontested divorce you agree on everything—including how property will be divided. If there is a disagreement on even one issue of divorce, your divorce is considered contested.
Marital Settlement Agreement
When you can negotiate a settlement agreement it can be beneficial to both you and your soon-to-be-ex spouse because you can control which assets (and liabilities) and how they are divided according to you and your spouse’s priorities and level of interest in any given item.
You may have an asset or property that you especially want to come away with. Through negotiations, you could offer to give up something to your spouse of approximately equal value that is not as important to you. Whether you want total ownership of a business, the family home, rental properties, stocks or an IRA, or another asset, offering to give up something to get something can work if you are both willing to compromise. Your respective divorce attorneys can assist you with this process. Sometimes mediation helps as well.
Equitable Distribution by the Court
If there is too much contention between you to try and work toward agreement, or if you do not necessarily have an antagonistic relationship but are just too far apart on who gets what, then a New Jersey Court will divide your assets for you using equitable distribution, which does not mean a 50/50 split—although it could. Rather, the judge will consider various factors as stated in N.J.S.A. 2A:34-23.1 to arrive at what they believe is a fair, but not necessarily equal, division.
Whether you are heading toward negotiations or court, preparing for what is to come will improve your chances of getting what you want. Think through your goals in dividing property, what you are willing to give up, and what you want to get. Then communicate these goals to your divorce attorney who will work with you and the strategic approach to help you best achieve them.
DO NOT HIDE ASSETS—EVER
You may think you can keep an asset hidden from your spouse so it won’t be disclosed or subject to equitable distribution, but doing so will cause you more grief than divulging it. New Jersey law requires full disclosure of assets. Even if you believe an asset is yours alone and should not be added to the marital property pot, you must disclose it. By failing to do so you could potentially lose the asset entirely and be held in contempt of court with financial and other sanctions.
On the other hand, if you suspect your spouse is hiding assets from you, notify your attorney right away. Your divorce lawyer will investigate to discover whether that is indeed the case, even bringing in forensic accountants and other financial experts where needed, and even conducting depositions if need be; if property and assets have not been disclosed, your attorney will notify the court, file the appropriate court applications to obtain the information, and advocate to protect your interests.
SPEAK WITH AN EXPERIENCED NEW JERSEY DIVORCE LAWYER
The attorneys at [MFR] Men’s & Fathers’ Rights Divorce Lawyers are dedicated to helping clients who are ending their marriage get the best possible outcome for the circumstances, including when it comes to assets. As a team of lawyers exclusively focused on divorce and family law and with decades of combined experience, we provide outstanding legal guidance for complex marital and financial situations.
To learn how we can help you protect your assets and keep more of what is yours post-divorce, call our law firm to arrange a confidential consultation at (201) 880-9770.
