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How can you secure your assets in case of divorce?

On Behalf of | Dec 29, 2023 | High-Asset Divorce

Divorce might be the last thing you think about when you first get married. However, with about half the marriages ending in divorce, it might be possible. For this reason, you might be concerned about protecting your assets in California from a divorce.

Understanding how property division works

As a community property state, California follows the principle that all marital or community property and liabilities should be divided equally. However, any separate property or debt, such as an inheritance received by one spouse or student loans taken before marriage, remain separate property unless assets are commingled, such as using an inheritance to buy a property with both spouses’ names on it.

Protecting assets before marriage

You can secure your property by signing a prenup. A prenup establishes what will be considered separate and marital property as well as how property will be divided in the case of divorce or death of one spouse. It can be very useful in a high-asset divorce, where spouses either came into the marriage with separate assets or acquired much wealth during the marriage.

Protecting assets during the divorce

If there is no prenup and you are headed for divorce, you still have options that can help you secure property. These options include:

  • Moving property intended for your children into an irrevocable trust such as a domestic asset protection trust, which cannot be undone
  • Buying out a spouse’s share of your pension plan by paying them the value of half the pension at the time of divorce
  • Opening a separate account in your name and transferring half the funds from a shared account but being transparent about it and keeping clear records

While it might be more challenging to protect your assets once the divorce begins, you do have a variety of options to help you. It may be helpful to review them carefully and consult with your divorce team for guidance and clarification.