We are often asked by our clients what are the most important assets to protect when facing a divorce. Obviously, the most important asset to any family is their children and providing for the best interests and welfare of their children. Here we are focusing on the assets that are typically the most important for clients to protect for their future well being. Each family will need to decide which assets are most important for their family. The following is intended to provide some guidance as to which assets are usually most significant when facing a divorce.
The most important assets to protect in a divorce are your retirement accounts. When considering the division of retirement accounts, you should consider the accounts in your name as well as the accounts your spouse has contributed to during your marriage. Often, in a homemaker situation only the working spouse has made a significant contribution. The division of this account will depend on the circumstances of your particular case, such as the length of the marriage, your contribution to the household and your financial needs. For most divorcing couples, the retirement accounts are the greatest single cash asset held in the marital estate, which is why they are considered one of the most important assets to protect in a divorce.
It is important to include all aspects of the retirement accounts, including profit sharing, pension funds, beneficiary designations and survivor benefits. The majority of our clients are not ready to retire at the time of divorce, and they may have acquired an interest in their spouse’s future pension plan payments or profit sharing, which you should protect in your divorce. Consideration should also be given as to whether you should be designated as the beneficiary of your spouse’s retirement account and whether you have an interest in survivor benefit portion of your spouse’s pension plan.
THE FAMILY HOME
For most families, the family home is the single largest asset in the marital estate. The family home may also have significant emotional value to you and your family. It is important to protect your home in a divorce. This is especially true if you have substantial equity in the home or if the home is currently undervalued. Consideration should be given as to whether it is more beneficial to you to list the home for sale to eliminate high mortgage payments or to cash out the equity in the home. There are a number of strategies which can be used to fairly distribute the equity in a home. This would include refinancing or an equalizing judgment using other assets in the marital estate to offset the value of the home.
Your business is the single most important asset to our clients who are business owners. You will need to provide for yourself and will need to retain your business finances and reputation. Protective Orders may be used to protect private business information, trade secrets and other sensitive information necessary to maintain the business. Quite often the most important issue in this area is obtaining an accurate valuation of the businesses value. Here, obtaining the appropriate financial records is essential to determining a proper value and obtaining your fair share of the business. You should always discuss how to best protect your business from divorce with an attorney who is experienced and knowledgeable about valuing and protecting business interests, closely-held businesses and professional practices.
In order to transition to a single household from two households, it is important to protect your financial accounts. Clients will need to transition from joint accounts to individual checking and savings accounts, as well as separate investment accounts. Maintaining your financial accounts is essential to providing access to liquid funds necessary to pay expenses and to continue after the divorce. Financial accounts are generally more liquid than retirement accounts and do not incur penalties upon withdrawal. Here financial restraining orders are appropriate to prevent the dissipation or wasting of assets during the divorce.
Often, our clients have property with special meaning and emotional value. These items generally include family heirlooms or other property with special meaning that has financial value. It is important to prioritize the items most important to you so that you can assure that those items are protected during the divorce. There are numerous options available to protect your property throughout the divorce.
FOCUS ON THE LONG TERM WHEN PROTECTING YOUR MARITAL ESTATE
You will ultimately need to decide which assets are important to protect as you go through the divorce. In making this decision, consider which type of assets will provide you and your family the greatest benefit in the long term and determine whether the benefits are financial or emotional. You should focus on the needs and security of your family first. You should also consider which assets will be most useful to establish yourself and to provide for your family after the divorce is finalized.
You should always consult an attorney regarding any situation more than a few thousand dollars at risk. You should also be aware that fighting over every little thing in the divorce will tend to drive up legal costs. With proper planning, you can protect the assets of your family and choose your battles wisely.
CONTACT PAUL F. SHERMAN FOR EXPERT ADVICE ON PROTECTING YOUR ASSETS IN DIVORCE.
We know you have more questions and we have answers. If you would like more information on how to protect your assets in a divorce, call the Law Offices of Paul F. Sherman at (503) 223-8441 or Contact Us for a free consultation.