If you are preparing for a divorce, one of your biggest concerns during this emotional time is protecting your assets, yourself and your future. Although the legal system attempts to safeguard the best interests of both parties, there is still plenty of room for negotiation in divorce proceedings, and it is important to avoid common mistakes that could put your assets at risk.
Here are five ways that you can protect your assets during a divorce.
1. Identify your Assets
Your first step when facing a divorce should be to identify all of your assets which will provide your attorney with a clear picture of your net worth. After listing all of your assets, you will need to clarify what is currently in your name and what belongs to your spouse.
When listing all of your assets be sure to include homes, vehicles, mortgages, investments, bank accounts, retirement accounts, high-value collections and other assets. Aim to be as thorough as possible in this effort, and do not forget to include any debts you have as well.
2. Obtain Copies of Financial Records
Although a list of assets is incredibly useful, it is essential to ensure you have everything in writing. One common mistake that spouses make when divorcing is assuming they will be able to obtain electronic copies of records any time they need them. Unfortunately, a spouse who has become vindictive may change the passwords on joint accounts to lock the other spouse out and prevent them from obtaining this information.
You will need to gather hard copies of financial documents such as bank account statements, brokerage firm statements, tax forms and any other financial documents that you or your spouse have signed recently.
3. Get Familiar With your State’s Laws
Divorce laws in the United States vary depending on the state, which means that your case may go differently than someone you know who lives in a different state. While some states use community property laws, others follow an equitable distribution model.
For example, Maryland is an equitable distribution state; this means that the court is not required to divide property equally between spouses. Instead, it will divide the property in a manner that the court considers to be fair. In many instances, this does result in each spouse receiving half of the marital property, but that is not always the case.
Marital property generally includes assets that belong to the marriage itself and any property that either or both spouses acquired during their marriage. Any property that one spouse acquired via a gift or inheritance from a third party is typically excluded from the marital property category. In addition, the property that either spouse acquired prior to the marriage will be considered the separate property of that spouse.
4. Establish a Team of Professionals to Guide You Through the Divorce
When they know a divorce is on the horizon, many people want to hire an attorney immediately. Although friends and family who have gone through a divorce recently can be a good source of referrals, it is important to take your time to choose a divorce attorney who has experience in the particular areas of your divorce that you expect to be contentious or are most concerned about.
For example, if you anticipate a prolonged custody dispute, you should hire a divorce attorney with experience in child custody cases. If you and or your spouse are high net worth individuals, it is best to choose a divorce attorney who is experienced in handling high-asset divorces and work with professionals who can handle the complexities of these cases, such as business valuations.
However, you should also hire a trustworthy financial advisor if you do not already have one. This is often the case for people whose spouse managed the finances in the marriage. When divorcing, a spouse who is not financially savvy should work with someone who can explain matters in simple terms that they understand. In addition, the emotions that surround divorce can cloud judgment, so having an unbiased third party to ensure you are properly protected is vital.
When hiring a divorce attorney and a financial planner, it is good practice to talk to two or three professionals to ensure you have a good rapport and positive communications before making your decision.
5. Determine What Matters Most to You in the Divorce
Your divorce attorney will do the best that they can to obtain a settlement that works for you, but you need to be able to communicate your desires and needs to them first. Keep in mind that what may seem to be a reasonable number in negotiations may end up falling very short in practice once you are living on your own.
Determine how much money you will need to maintain your standard of living and support your children, and take note of any specific assets that you want your attorney to focus on protecting during the divorce process.
Schedule a Consultation with the Maryland Divorce Attorneys
The attorneys at SIEGELLAW have decades of experience managing divorces in Maryland. Our areas of concentration include high-asset divorces, child custody, men’s rights and property division, and we work relentlessly to protect our clients’ interests. Contact us today to schedule a consultation to discuss your case.