Divorce Asset Protection
Divorce asset protection is your best insurance against a possible financial nightmare. When emotions turn bitter as relations sour, people will tend to want to grab as much they can grab as possible. The only way to ensure a fair distribution of previously shared assets is to put things down in writing, and create a well-worded pre-nuptial agreement.
States with Community Property Laws
These states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.
If we were to follow community property law, in the absence of a valid pre or post marital agreement, the court will equally divide assets acquired during the marriage. When the asset was acquired is thus the most important factor in deciding how assets will be decided.
States without Community Property Laws
States without community property laws are also called equitable distribution states, as the courts have full discretion to divide property equitably or fairly. In making a judgment on what is equitable, factors considered include: length of marriage, age of spouses, conduct of spouses, earnings potential.
Unfortunately, courts tend to distribute both assets acquired before the marriage and assets acquired during the marriage (both nonmarital and marital assets). These, court decisions can be highly unpredictable and far from desirable.
More Divorce Asset Protection
Especially when leaving assets for your children, you probably did not intend your assets to flow into the hands of their ex-spouses. How do you ensure that your assets remain in the family? The best way to achieve this is to create an irrevocable trust.
Irrevocable trusts are extremely effective in this regard, as you can specify that the beneficiaries will be solely your grandchildren, and draft it such that neither their creditors nor their ex-spouses can gain any access to the trust assets.