The 5 Most Important Assets to Protect in a Divorce
When facing a divorce, your mind will likely be racing as you think about everything you want to protect, from your finances and property to your relationship with your children. In this post, we are focusing on the assets that are typically the most important to protect for your future well being. Of course, you will decide which are most important to you; this article is intended to provide some guidance on which assets are usually most significant.
#1: Retirement Accounts
Among the most important assets to protect in a divorce are your retirement accounts. When thinking about dividing retirement accounts, you should consider the accounts in your name as well as the accounts your spouse has contributed to during your marriage. The latter is particularly important if you chose to contribute less to your individual retirement because your spouse was contributing more to his or her retirement account. These retirement accounts may have significant value that would require substantial effort to rebuild, which is why they are considered one of the most important assets to protect in a divorce.
When considering the retirement accounts, you should not forget about pension plans, beneficiary designations, and survivor benefits. Even if you and your spouse are not ready to retire at the time of your divorce, you may have an interest in your spouse's future pension plan payments, which you should protect in your divorce. You should also be sure to consider whether you should be designated the beneficiary on your spouse's retirement account or whether you have an interest in the survivor benefit portion of your spouse's pension plan.
#2: Your Home
For many individuals going through a divorce, the family home is the largest of their assets, and it may also have an emotional value to you. It can be beneficial to protect your home in the divorce, particularly if you have equity in the home or if it is currently undervalued. You may want to consider whether it is more beneficial to you to list the home for sale in order to get rid of high mortgage payments or to receive the equity in the home. (More considerations on how to divide the family home as an asset.)
If one person is awarded the home, you should keep in mind that many individuals are not able to refinance their home after a divorce, so if the party who is to pay the mortgage is unable to make those payments, it may affect both parties' credit histories.
#3: Business Interests
You will need to be able to continue to provide for yourself after your divorce and if you are a business owner, you would need to maintain your business's finances and reputation. You might consider a protective order for any business records provided as part of your divorce in order to protect private business information. You might also consider requesting a regular accounting for the business so that you are kept informed. You should discuss how to best protect your business in a divorce with an attorney who is knowledgeable about valuing and protecting business interests, closely held businesses, and professional practices.
#4: Financial Accounts
As you transition from a single household to two households, it is important to protect your financial accounts. This includes checking and savings accounts, as well as other investment accounts. You and your spouse will both likely need access to liquid funds when your divorce is finalized. As financial accounts are often much more liquid than retirement accounts, you should try to protect your financial accounts as you go through your divorce so that the funds are not depleted while you wait to finalize your case.
#5: Property With Special Meaning
When going through a divorce, you should consider the assets that have an emotional value to you, like your family heirlooms, as well as the assets that have a financial value. You should consider which property items are most important to you so that you can ensure that those items are protected throughout your dissolution. You can find out what options are available to protect your property throughout your divorce by consulting with a qualified divorce lawyer.
Consider the Long Term
Ultimately, you will decide which assets are most important to you (and therefore most important to protect) as you go through your divorce. As you make these decisions, consider which types of assets will provide you the greatest benefit in the long term, whether that benefit is financial or emotional. You should also consider which assets will be most useful to allow you to establish yourself and provide for yourself after your divorce is finalized.
In any situation with more than a few thousand dollars at risk, it is highly recommended that you consult with a family law attorney to discuss how to protect your assets during a divorce. Also, be aware that fighting over every little thing in a divorce will tend to drive up your legal costs — so make sure you choose your battles wisely ( not like these people).