5 Steps To Protecting Your Wealth In Marriage

5 Steps To Protecting Your Wealth In Marriage

Lack of money can put stress on a marriage, but having lots of it does not guarantee things won’t end in divorce.

Having a plan for managing and discussing money is a crucial step for every marriage, especially among high-asset couples. This fact is all the more relevant on the other side of the marriage when the relationship breaks down into a contested divorce. However, there are steps any couple may take upon entering into marriage to help minimize the complexity of your High-Asset Divorce.

Step 1: Pursue Open and Direct Conversations About Money, Always

Money is one of the most difficult things to discuss in a marriage. That’s because there is no set playbook for two people to achieve financial success together. Today, we’re seeing more couples wait until later in life to get married, which means it’s more likely than ever that each spouse will bring assets into marriage in the form of a business, inheritance or investment—assets your partner had no “part” in raising. In order to create an effective strategy for managing wealth in marriage requires open and dispassionate lines of communication, notably between spouses, but it helps immeasurably to bring in outside counsel to facilitate matters directly.

Step 2: Manage Personal Funds Separately

If at any point during the marriage, your marital funds find their way into a non-marital account then the division no longer applies and all funds are considered marital. To protect an account that has money in it from before marriage, or to protect funds received as a non-marital gift or inheritance during marriage, you must maintain total separation from all marital use. When these funds blend a court considers all funds within the account “fungible” and indistinguishable from a couple’s shared wealth.

Step 3: Keep Real Estate Assets Separate

What happens when one individual owns a home, gets married, and then adds their spouse’s name to the deed? It is considered a gift of half the value of the home which is applicable in divorce. While nobody in this situation is thinking about getting a divorce, it is an appropriate move for homeowners to define the terms of their real estate in light of the marital contract. Surely you want your spouse and children to continue living in your home in any instance of premature death, yet you probably are not looking to split the house in half if your marriage hits the skids. Consider estate planning to protect your family’s stake to the house in the event of your untimely passing, otherwise, it is not recommended you add your spouse to pre-existing real estate deeds.

Similarly, it important to avoid using marital funds to maintain, enhance, or pay the mortgage of non-marital property. The cleanest way to maintain tthe division of ownership in this situation is to never use shared funds, otherwise, a court will be faced with evaluating and dividing the impact of your shared investments.

Step 4: Prepare a Valuation of Your Business at Marriage

Without a clear-cut separation outlined in a prenuptial agreement, the best strategy for recouping the value of your business amidst divorce is to refer to a documented valuation issued at the time of marriage to substantiate a claim for the pre-marital value of the business. Whatever gain in value the business receives during marriage will be split equally, minus the inherited value which you thoughtfully documented at the time of matrimony.

Step 5: Save Statements For All Retirement Accounts

Similar to the last point, holding an accurate record of your pre-marital retirement funds should allow you to retrieve the initial amount while splitting any gains with your partner. Whether you are a 401k hawk or the set it and forget it type, tracking down verified records of your retirement funds can prove more difficult than one would expect after years of marriage. Best to hedge your bets and copy those files to a secure location that can be referenced by your legal representation.

Protecting your high-value assets and property with a prenuptial agreement is the easiest and most certain route, however, should you choose to forgo this step, following these 5 steps should help you protect your premarital and non-marital assets during divorce.

The attorneys at Brodie & Friedman, P.A. in Boca Raton manage every facet of litigation and negotiation for high net worth divorces. In representing the entire West Palm Beach community, our legal team regularly works with top business owners and executives, high-earning doctors or athletes and other professionals with notable assets. We also work with the spouses of high-income earners who wish to secure a fair settlement of the marital estate. 
With over 30 years of combined experience, Jason Brodie Esq. and Joshua Friedman Esq. will guide you toward realistic goals and provide committed advocacy toward achieving them. They are known throughout South Florida for dedicated client service, tenacity, and success in complex divorce litigation involving property division, child custody, and spousal support. 

To get a better understanding of the qualities our reputation is built on, contact our office in Boca Raton to schedule your initial phone consultation (561) 392-5100

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