How Are Assets and Finances Divided During a Divorce?

Divorce, especially when contested, can be heart-wrenching, with each party striving to protect their interests. Southfield divorce attorneys say that property division can complicate divorce, as there is no one-size-fits-all solution to the matter. However, courts often have a template that enables them to evaluate crucial factors to help them decide your divorce case fairly.  Typically, you will reach a settlement in your divorce, but there can be a time when your divorce case goes to trial.  In that case…

Judges consider the following:

  •         The couple’s assets and debts and what they are worth when combined
  •         The direct financial contributions of each spouse to the relationship, such as wages
  •         Indirect financial contributions of each spouse
  •         Non-monetary contributions to the family, such as dedicating time to take care of the family
  •         Future requirements such as financial resources, earning capacity, age, health, and caring responsibilities

The outcome in a property division case depends on individual circumstances unique to the divorcing couple. Nonetheless, each spouse fights to protect their interests to end up with as many assets as possible. With the help of skilled family lawyers in Oakland, you can create a strategy to protect your assets by proving your contributions.

How to Protect Your Finances During a Divorce

After years of investing in the marriage, you don’t want to lose everything you worked so hard for to your soon-to-be ex-spouse. Southfield divorce attorneys recommend taking steps to minimize the financial damage of a divorce.

Make a Comprehensive List of All Your Assets and Liabilities

Remembering everything you own when you’re emotionally fraught can be challenging, and you don’t want to risk leaving anything out. Your family lawyers in Oakland must see an inventory of your assets and finances when determining property division. Your list should comprise the following:

  •         Your residential home, second home, and any other real estate you own
  •         Your investment portfolio
  •         Your businesses and their valuations
  •         Employment benefits
  •         Wills and trusts
  •         Life and health insurance
  •         Bank accounts and statements
  •         Deeds
  •         Pension and retirement accounts
  •         Cars and recreational vehicles
  •         Mortgages and lines of credit
  •         Tax returns
  •         Jewelry and contents in your safe deposit boxes

It’s also crucial to attach the documents that prove ownership of these items.

Keep Records of Gifts and Inheritances

All assets acquired during marriage are classified as marital property and are subject to division during divorce. However, gifts and inheritances are exempted from marital assets and should not be divided between the divorcing parties. Oakland family attorneys recommend keeping a proper paper trail demonstrating how you acquired the items. Examples are:

  •         Notices of Assessment
  •         Legal statements
  •         Valuations
  •         Any other relevant document that can establish ownership

In addition to documenting these items, keeping them separate and distinct from family items is important. For example, paying a mortgage for the family home with money acquired through inheritance may seem like a good idea. However, it would also mean that you lose any legal protections on the inheritance, and it would be subject to a family law claim.

Consider Creating a Prenuptial or Postnuptial Agreement

A signed contract between you and your ex-spouse can help you keep what’s yours during a divorce settlement. You can stipulate how you plan to split possessions, earnings, or bonuses through a prenuptial or postnuptial contract.

Oakland family attorneys say these agreements are crucial for entrepreneurs who don’t want to lose half of the businesses they have worked hard to build over the years. If you didn’t sign a prenuptial before marriage, you can sign a postnuptial agreement several years later but consult extensively with experienced lawyers to do it right.

Avoid Keeping Everything in a Joint Account

A joint account with your spouse strengthens trust and increases commitment toward financial goals. However, it can be your greatest undoing during a divorce, especially if you’re the primary contributor. Commingled assets can be challenging to untangle amid a contested divorce. An example of a commingled asset would be something you owned separately, such as an investment account that you owned before you married, and then during the marriage you added your spouse’s name, and withdrew money, and also contributed money to that account. Now what would have been a separate investment account and maybe not divisible with your spouse in a divorce, is now probably something you have to divide equally.

An embittered ex can access and drain the account by transferring funds to their separate account to seek revenge, leaving you with zero funds to rebuild your life. Divorce attorneys in Southfield recommend, in the right circumstances, having an individual account to your name, which you can quickly liquidate to cover various expenses during the divorce.

Don’t Hide Assets or Liquidate Them

Due to the conflict that may arise during a divorce, it can be tempting to hide some assets to avoid having them divided. Unfortunately, this can be a bad move, especially if your ex realizes you’re holding back some items. If they decide to take steps to uncover them and you’re found guilty, you risk facing inevitable legal consequences, further complicating the settlement proceedings.
Your lawyers will also advise you against liquidating your assets before or during the divorce proceedings. Doing so can trigger unwanted capital gains that can affect the settlement outcome, can create bad will, and may be in violation of a court order. A more favorable option would be transferring the assets to your spouse through a spousal rollover to minimize tax liability when dividing assets, or other methods depending on your situation.

A Skilled Family Lawyer Providing Legal Counsel on Documenting Financial Assets in a Divorce

Protecting your money and assets during a divorce is crucial, especially if you and your ex-spouse can’t agree amicably on asset division. Family lawyers advise that you properly document your financial contributions during the marriage to ensure fair distribution while protecting your interests and future.

ADAM American Divorce Association of Men is a reputable family law firm with knowledgeable divorce lawyers in Oakland. We can assess your case and provide legal insights in creating a strategy to protect your marital financial contributions. We understand how draining divorce can be and want to help you fight for a favorable outcome. Call us at 248-290-6675 to schedule a FREE case assessment.