Protecting Your Financial Future Requires Taking Steps Today
If your marriage is ending, you have a lot to deal with, but in Colorado, asset protection in divorce should be a top priority. How the intertwined property, assets, and debts of a couple get distributed and valued are some of the most contentious and frustrating issues in divorce proceedings.
Additionally, those assets and the couple’s finances are vulnerable to a spouse who wants to deprive the other of cash, deny them access to bank and credit card accounts, run up bills, or otherwise use assets as a weapon in their divorce.
What Is Pre-Divorce Asset Protection?
Pre-divorce asset protection aims to minimize the impact of these proceedings on your financial stability and protect your rights and access to assets that are rightfully yours. By proactively safeguarding your assets before any marital issues arise, you can maintain control over your financial future and minimize the chances of your spouse engaging in underhanded tricks. A Colorado Springs asset protection attorney will answer your questions about pre-divorce asset protection and guide you along the path to asset security.
Additionally, even though a couple may share finances and resources after years or decades of marriage, there can be an imbalance between the spouses regarding their knowledge about or control over those finances.
Furthermore, the spouse who does not know their financial situation or how to access cash and other resources put themself at serious risk unless they take steps to get up to speed and get the information they need.
For small business owners or individuals who have significant ownership in a business, asset protection in divorce is even more critical. Without proper measures, a divorce can potentially jeopardize the viability of the business or result in the non-owning spouse obtaining the right to intervene in the company’s affairs.
Structuring business assets, implementing shareholder agreements, and defining clear roles and responsibilities can help shield the business from confusion or turbulence over asset protection in divorce. Your Colorado Springs divorce lawyer will help you navigate the choppy waters of asset protection.
Strategies For Asset Protection In Divorce
There are many strategies for protecting your assets from the impact of a divorce. Which steps you can and should take depends on your circumstances and the timing of your efforts. Regardless of the specifics, however, you should consult an experienced Colorado Springs divorce attorney and a qualified financial advisor who will advise you on securing asset protection in divorce. Some of those valuable tactics include:
Establishing Separate Accounts
Throughout a marriage, spouses share a lot, including the accounts and services we rely on daily. These accounts and services include bank accounts, credit cards, cell phone accounts, and Wi-Fi service.
Establishing such accounts in your name or transferring them from your spouse can help maintain your privacy and minimize the opportunities for your spouse to interfere with your ability to control and access these accounts.
Gathering Financial Information and Documents
You will need a complete understanding of your financial situation as you begin the divorce process. To start with, take an inventory of all personal property and gather the necessary financial documents and information your divorce attorney will need. If you do not handle the finances, bills, taxes, and accounts, you will have to do some digging to get this information.
Prenuptial and Postnuptial Agreements
The most well-known form of asset protection in divorce is put in place before the couple ties the knot and well before any thoughts of divorce arise. A prenuptial agreement, signed and agreed to by both soon-to-be-spouses, is a legally binding contract that outlines the division of assets, possible spousal support, and other legal and financial matters in the event of a divorce.
While such agreements are generally enforceable in Colorado, a judge could declare a prenup void and unenforceable if it was obtained through fraud, a spouse failed to fully and accurately disclose their assets or one spouse signed the agreement under duress, among other limited reasons. A local Colorado Springs divorce attorney will understand how to work within these circumstances to ensure the best possible outcome for your case.
Related: Can A Colorado Prenuptial Agreement be Overturned or Changed?
Similar to prenuptial agreements, postnuptial agreements are entered into after marriage. Although less common, they serve the same purpose—defining the terms of asset division, spousal support, and other financial matters in case of divorce.
Postnuptial agreements can be advisable for couples who did not address financial issues before marriage or if they have experienced changes in their financial situation during the marriage.
Changing Beneficiaries In Estate Planning Documents and Retirement Accounts
If you have a will or revocable trust, change those documents to ensure your spouse is no longer a beneficiary or trustee of your assets. Overlooking this critical change could mean that your former spouse would receive or control your assets in the event of your death or incapacity. That is a nightmare scenario for many seeking asset protection in divorce.
The amounts you have contributed to retirement plans such as 401(k)’s, Individual Retirement Accounts (IRAs), and pension plans over the years may be some of the most substantial assets in your portfolio. Generally, contributions you made to such plans throughout the marriage are joint property subject to equitable division.
These plans also provide for the designation of beneficiaries for the proceeds of the plans in the event of your death. Under federal law, a spouse will always receive the assets in a 401(k) unless they sign a written waiver and consent to naming another beneficiary.
Related: What To Ask For In a Divorce Settlement Agreement
The same goes for qualified pension plans. But no such consent is required to change the beneficiary under your IRA. You may remove your spouse as a beneficiary at any time, even while you are still married.
While changing your beneficiary designations is crucial, it only impacts what happens to the funds in your account upon your death. How those accounts are treated, valued, and divided before then will be resolved in your divorce proceeding. Your Colorado Springs attorney will take every step necessary for asset protection in divorce proceedings.
At a minimum, divorcing individuals in Colorado should inventory all insurance and retirement plans with beneficiary information so that the beneficiary can be changed immediately after the divorce if they have yet to be beforehand.
Revoking or Revising Your Financial Power of Attorney
A financial power of attorney is a document in which one party gives authority to another party to handle their financial and economic affairs if they become incapacitated or are otherwise unable to make or communicate their decisions.
Most married couples give their spouse such authority in these documents. If you named your spouse as your agent in a durable power of attorney, they can act and make decisions on your behalf if you become incapacitated.
Simply put, they can withdraw money from your bank accounts, enter into agreements for you, and buy or sell property in your name. The divorce attorneys at Perkins Law will work tirelessly to ensure your rights are protected during and after your divorce.
Searching for Asset Protection in Divorce? Call Colorado Springs Divorce Attorneys Perkins Law Today
Having an experienced divorce attorney on your side is a step toward ensuring that you will leave your marriage with all the assets you are entitled to. Rest assured that the Colorado Springs divorce attorneys at Perkins Law will do all to secure your asset protection in divorce. Contact the team of lawyers at Perkins Law to arrange your free initial consultation.
