How do I protect myself financially in a divorce?
Chances are that if you are reading this article, you are already going through a separation or you are considering separating but have some concerns about how your financial security moving forward. Your natural question is how do I protect myself financially in a divorce?
Before considering the now, this article digs back into the period before divorce is even a consideration and looks at broad ways to safeguard your finances under marriage.
Consider Putting Safeguards in place Before You Marry
As unfathomable as it is to even think about when entering a marriage or relationship, the unfortunate reality is that 1 in 3 marriages end in divorce or separation.
And as unpalatable as it may be to discuss entering into a “prenup” or Binding Financial Agreement, the reality is that it is the most sensible first port of call to protect your financial assets before you enter a marriage.
Seeking expert legal advice on financial and property matters could also help you protect your business and other assets.
As more and more couples marry later in life and/or have a second marriage later in life, they will in all likelihood bring their own assets and finances into the marriage – which can sometimes be of significant value.
Without a pre-nup or Financial Agreement in place, this will expose your assets to be considered under any financial settlement as part of the collective pool of assets and thus available for distribution between you and your partner (or ex-partner as they may be at that time).
While your contributions to the collective asset pool will be considered (amongst other things) before any division, variables such as the length of the relationship, the effect of the marriage on each party, and other contributions (financial and otherwise) that each party made during the relationship can offset the value of this “initial contribution”.
If however there is a pre-nup or Financial Agreement in place, it will not only clearly set out who brought what into the relationship, but how those assets should be divided in the event of separation down the track.
Protecting Your Assets During Marriage
This again is an unpalatable action that most will avoid, but common sense – often borne out of hindsight – says that it would be best to seek expert legal and financial advice on the most effective ways to protect your personal and business assets in the event of separation – whether because they are complex, significant, part of a family business or because you sense that separation is looming.
While most people are aware of the pre-nup, that is the Financial Agreement entered into before marriage, most are unaware that financial agreement can also be entered into during the marriage. Entering into a financial agreement before ordering marriage is arguably the best time to do so as the parties are amicable and better placed to be objective about matters.
Protecting Your Assets During Divorce
This final section looks at the stage where divorce is inevitable, and your relationship has broken down.
The safest protection for your financial assets at this stage is to engage a family law firm for legal advice on your entitlements and how to best ensure a quick, amicable and cost effective outcome. Specialist divorce or family lawyers will be able to liaise on your behalf and with sufficient experience, will help you reach the best financial outcome.
If you need any help to protect your finances as you enter divorce proceedings, talk to Damien Greer Lawyers on (07) 3837 5500.