In a divorce, it’s common for one or both spouses to have a particular interest in keeping certain assets once their marriage comes to an end. Whether the family home, a privately-held business, a highly-valued car or boat, or a beloved collection of art or jewelry, you are not alone if there are certain assets with which you aren’t willing to part as part of your divorce.
When San Diego couples find themselves broiled in a possible divorce situation, their future financial status seems daunting and frightening. In order to protect yourself if you are in this scenario, it is strongly advisable to protect any and all assets.
As we have previously discussed, since California is a “community property” state, the courts must generally attempt to divide divorcing spouses’ property equally. While this does not typically require splitting the proverbial baby – especially for high-net-worth couples – it does mean that your overall marital estate will need to be roughly split down the middle. So, if there are certain assets you want to protect, what can you do to make sure they stay with you after your divorce?
Options for Protecting Individual Assets During Your Divorce
Keeping California’s community property law in mind, the following are three potential ways to protect individual assets in a California divorce:
1. Prove that The Asset You Want to Keep is Separate Property.
The first, and perhaps easiest, way to protect certain assets in a divorce is to keep them out of your property division all together. You can do this if the assets qualify as “separate property.” Generally speaking, an asset can qualify as separate property if:
- It was acquired prior to the marriage,
- It was a gift to a single spouse during the marriage,
- It constitutes the proceeds of separate property, or
- It was acquired after a separation.
Of course, there are exceptions to these rules, and there are other specialized categories as well. But, these are the main classes of separate property in California. If an asset qualifies as separate property, it will not be subject to division in your divorce.
2. Negotiate a Settlement that Gives You What You Want.
If proving that the asset qualifies as separate property is out of the question, then your best bet may be to negotiate to protect the asset as part of your overall divorce settlement. As we mentioned above, community property estates do not need to be (and rarely are) split right down the middle. If you run your own business and want to make sure that your spouse does not acquire an ownership interest; if you want to remain in the family home; or, if you want to make sure you get to keep your car, boat, collection, or other prized piece of tangible or intangible property, you should discuss this with your lawyer so that you can develop and execute a negotiation strategy designed to protect it in your divorce.
3. Dust Off Your Prenuptial Agreement.
Finally, if you and your spouse entered into a prenuptial agreement, now could be the time to use it to your advantage. Prenuptial agreements can serve a number of different purposes, but one of the most common is undoubtedly to establish protections for assets that would otherwise be subject to division in a divorce. If your prenuptial agreement states that you are entitled to retain certain assets after your divorce, even if those assets would normally be subject to division, you and your spouse’s agreement will prevail over the generally-applicable rules. That is, of course, assuming that your prenuptial agreement is legally enforceable.
San Diego Divorce Tips
Other steps you should immediately consider are setting up separate accounts as well as shutting down any credit cards if they are not needed to purchase the necessities of life. You could be liable for one-half of the costif your partner goes on a wild shopping spree thinking he or she will not have to pay the bill.
Also, it is crucial that you are completely aware of all your assets as well as outstanding debt. It is important to take the time to review retirement accounts, pensions, and deferred compensation plans. It would be quite the rude awakening if your partner throws you a curve ball at your settlement.
San Diego Divorce Tips to Protect Your Assets
Another important matter is in regards to your will and trust if you have an estate plan. As quickly as possible, revoke your trust, re title your properties into tenants-in-common, and change your will to show your new situation. I am sure you would not want your ex-spouse to inherit any of your possessions once you are gone.
Remember, it is a process that must be gone through. Bank accounts can and should be divided right away. Also, do not forget that both parties are liable for credit card debt if they signed for the card. If you were on the card and your ex-spouse refuses to pay, the company will come to you demanding payment.
Speak with North County Divorce Attorney and Certified Family Law Specialist Richard M. Renkin
If you would like more information about how you can protect specific assets in your California divorce, we encourage you to contact us for a confidential consultation. To schedule an appointment with divorce attorney and Certified Family Law Specialist Richard M. Renkin, please call our North County law offices at 619-299-7100 or request an appointment online today.