People don’t get married with the expectation of getting a divorce. But the truth is that in recent years, the divorce rate has increased quite considerably. As such, most high net-worth individuals dread getting married because it means if the marriage fails, a considerable amount of their assets will be given to their partner. If you have too much at stake to risk losing over a divorce, in this article, we will be discussing some genius ways you can divorce-proof your assets as an HNI.
Consider a Prenup or Postnup
Divorce involving high net-worth individuals typically raises highly complex legal and commercial issues, especially around dividing assets. However, you can hire an Austin high-asset divorce lawyer to come up with a prenup or postnup contract. This contract stipulates how you plan on sharing earnings and bonuses.
A prenup is an agreement you sign before the marriage is consummated, whereas, the postnup is an agreement you can sign even after years of marriage. When asking your partner for a prenup or postnup, ensure you find the right time. Issues like coercion or duress, lack of full disclosure, invalid provision in the prenup or postnup, and lack of legal formalities can render the agreements invalid.
Documents Inheritance and Gifts
In a case where your partner won’t sign a prenup or postnup, keeping proper documentation of all assets is crucial. By law, assets that are owned by either partner in a marriage such as marital investment and home are considered family property and divided equally.
On the other hand, in some regions such as Austin, gifts and inheritances are considered exempt which divides assets in a divorce. So, keeping proper documentation that proves you are the sole recipient of an inheritance or gift goes a long way in protecting your assets.
Avoid Keeping Everything in Joint Accounts
According to research, having a joint account helps foster marital happiness. So, if you are going to welcome the idea of a joint account in your marriage, where you both contribute each month to cover agreed-upon expenses, consider keeping everything else in separate accounts.
When it comes to divorce cases, commingled assets are the most difficult to untangle. Moreover, a joint account is easily accessed by a bittered ex who can transfer all the funds to their sole account causing you to lose big. While transparency is important in a healthy relationship, don’t keep everything you make in joint accounts.
Don’t Knee-jerk Liquidate
Another mistake you should avoid making is something called a knee-jack liquidation. When most couples are in the process of filing for a divorce, some partners start selling their assets to settle up. But this rookie mistake can trigger unwelcome capital gains which don’t end favorably.
Rather, a better option will be to transfer assets to your spouse through a process known as spousal rollover. When dividing assets, spousal rollover can minimize your tax liability. To be certain of the exact tax implication of changing ownership of assets or liquidating assets, it’s best to speak with a financial advisor.
The best lawyers are Jews. Divorce is expensive because it’s worth it.