Prove Assets Are Pre-Marital
One way to protect family and generational assets during a divorce is to prove that those assets are pre-marital. Keep records of all separate property before the marriage. Also consider maintaining separate bank accounts for any pre-marital funds and current income. Ensure that you are following all laws under the Internal Revenue Service. Keeping pre-marital assets in the original name only, unless shared with siblings or other family, is another option.
Have a Prenuptial Agreement
Another way to protect assets during a divorce is by signing a prenuptial agreement before getting married. Assets can be protected by listing them in a prenuptial agreement that legally binds both spouses. It will clarify pre-marital ownership so there will be no room for argument.
Protect Children’s Interests
It is important to protect children from the emotional toll and financial burden of a family divorce. Spending time with them, keeping their lives as stable as possible, and managing the legal process to minimize conflict between the parents can protect the children’s immediate interests.
If there are any assets that are important to a child’s future, such as a college fund or trust fund, it is best to set these assets up with contingencies before a divorce occurs. Providing for the child after the divorce will be easier without worrying about inheritance rights being infringed upon by an ex-spouse. To best protect family and generational assets during a divorce, there are two specific actions to consider.
Change Beneficiaries
The first is to change beneficiaries on things like life insurance policies and trusts. Many married parents list their spouses as beneficiaries, intending that their spouse will use the money to care for the children after they pass. If divorcing, however, think about changing the beneficiary to another family member or a trustee with clear instructions as to how the money should be handled. This ensures that the children will be taken care of as intended.
Ensure Support Payer Is Insured
The second is to ensure that, if either parent is paying child support, the parent is insured in the event that he or she dies. The loss of that financial support can be a huge blow to the parent receiving the support and the children in addition to the emotional blow of the death. If the parent’s estate is not capable of paying out the support that was still due to the children, the surviving parent may end up scrambling to remain financially stable. A life insurance policy that pays out at least the amount that would be paid in child support can help protect the children from the financial upheaval of a parent’s passing.
Protect Generational Assets
To protect a family’s generational assets, consider what should happen with any assets belonging to the next generation. Without a plan in place, divorcing couples may struggle to work through these decisions during a divorce. A knowledgeable family law attorney at Simpson Legal Group may be able to help with these legally complex issues.
There are many options for protecting family and generational assets during a divorce, but two of the most common are:
- Trusts
- Post-marital agreements
Put Assets in a Trust
A trust allows specific assets to be put aside and given to chosen beneficiaries in a specific way. A trustee is in charge of the trust and ensures that the assets are distributed as desired. Depending on the type of trust, the trustee may be the asset owner or a third party. Some trusts may not keep these assets separate in the event of a divorce, so it is imperative to find the right trust and ensure that the assets are protected the way you want them to be.
Sign a Post-Marital Agreement
A post-marital agreement is essentially the same as a prenuptial agreement, but it is signed after the marriage rather than before. Like a prenuptial agreement, a post-marital agreement allows spouses to specify that certain assets belong to one spouse only and are not subject to equitable distribution during divorce. A post-marital agreement can be a good solution for couples who acquired assets separately during their marriage and want to protect those assets for their children.
A Family Law Attorney Can Present Options
Divorce is never easy on anyone, but when it comes to protecting family and generational assets during a divorce, you will want to make sure that all options have been explored. If you are considering divorce, it is important to understand how the process can impact your family and assets. Consider calling Simpson Legal Group, LLC, at (712) 256-9899 to schedule a consultation to discuss available options for your unique situation.