Easy Steps to Protect Your Assets in a Divorce

July 26, 2012

Easy Steps to Protect Your Assets in a Divorce

Getting a divorce can be a complicated, messy process for unprepared couples. However, by taking certain steps, those considering divorce can increase the odds of achieving a fair result.

When the vague idea of divorcebecomes a reality, it's important to immediately separate financial assets such as checking, savings and credit card accounts. Individuals should try to maintain, or begin creating, financial independence and credit in their own names. Further, some spouses may try to cut off -- or take advantage of -- the other's financial lifelines. Carving out independence is crucial in this situation.

Get a Clear Financial Picture

Invest time and energy into creating a full list of all personal and family assets, debts, income and expenses, including property like real estate and cars. In an amicable divorce, this may be as simple as sitting down with a spouse. In other instances, it's important to do research and calculate amounts for all financial accounts, including retirement accounts, pensions and bank accounts.

Under Colorado law, a couple's assets and debts obtained or incurred during the marriage are "marital property" that is equitably divided upon divorce. This means that the couple's property may not be split evenly between the two, but rather in a manner that is fair to each individual. Identifying all assets and debts is essential to achieve this result.

"Separate property" of a spouse is not part of the marital property, and therefore not divisible by the Court. However the rules regarding "tracing" or following separate property that was inherited, gifted or existed prior to the marriage are complex, and can be extremely important to the final result in a case. It is common that couples mistakenly transfer separate property into joint accounts or otherwise lose the benefits they could have had from retaining separate property. An experienced divorce attorney can help avoid these results if contacted early on before financial decisions or transfers are made.

Joint debts, including mortgages or lines of credit, can greatly limit the options in a divorce case. Creditors, such as credit card companies and mortgage lenders are not parties to the divorce action, and they are therefore not bound by the divorce orders. Frequently parties discuss division of the debt without any real understanding of how the lenders are affected, and that causes problems after the case is over. Frequently also, the existence of larger mortgages or lines of credit that are in joint names prevent a party who may want to retain the family home from doing so. Properly understanding and managing debt prior to a divorce action, with the help of a skilled divorce attorney can help avoid problems in the divorce itself.

Get Legal Advice

Once a divorce is filed, the law restricts a party's ability to make changes to important legal documents such as wills, property titles, etc. An experienced divorce attorney can help make decisions about what actions should be taken prior to filing of a case or after the case is finalized. Because a divorce can have a significant impact on so many areas of your life, ranging from financial and property settlements to child custody arrangements, the assistance and advocacy of a knowledgeable divorce attorney is invaluable if you are considering getting divorced.

Article provided by Buchholz, McDowell & Norman, LLP
Visit us at http://www.bldrlegal.com