Divorce can significantly impact your finances. If you did not get a prenuptial agreement, you might be worried about what will happen to your assets. Thankfully, there are still steps you can take to protect certain assets from property division. Here are some top tips for protecting your assets and minimizing the financial damage of divorce.
1. Evaluate your liquid assets
While you might initially focus on sentimental assets such as your car or house, you want to carefully value your joint liquid assets including investment portfolios and savings accounts. Getting the house from the settlement might not be as beneficial as you assume if you cannot pay property taxes or maintenance costs.
2. Consider tax implications
Avoid inaccurate asset appraisals. If you fail to account for tax consequences, you could end up with significantly lopsided asset division. For example, your retirement accounts are worth less than the balances due to deferred taxes upon withdrawal. If you are a business owner, get your business valuated with tax liabilities in mind.
3. Search for hidden assets
While you might think of your spouse as an honest person despite marital difficulties, it is common for people to hide assets throughout marriage and divorce. Your spouse could have sold securities without accounting for them. He or she may have added a friend on the business payroll to disguise income. Make sure you watch for warning signs and look for hidden income or property.
4. Update your will
Chances are you do not want your soon-to-be-ex spouse to receive funds upon your death. If this is the case, make sure you revise your will. Update important beneficiary details for any investment or retirement accounts if you do not want your ex to inherit your assets.
It is possible to protect your financial interests during divorce. For more guidance, consult a divorce lawyer.