Family Law Articles
10 Smart Ways to Protect Your Assets
You do not need to lose your shirt during your Divorce. Here are 11 ways that you can ensure that you protect your assets.
SMART WAY #1: Try to settle your Separation / Divorce amicably. The more acrimonious your Separation / Divorce, the higher your legal fees will be. If you and your former spouse can negotiate issues rather than go to Trial, you can save tens of thousands of dollars.
SMART WAY #2: Stay involved with the family finances. It is common that one spouse looks after the family’s finances and the other spouse does not get involved. However, if you are not involved, you will not know what your spouse’s financial situation is, and you can easily be cheated.
SMART WAY #3: Have a Cohabitation Agreement / Marriage Contract prior to living together or getting married. The way the law divides assets when your relationship ends may not be the way you think is fair. By entering into a domestic contract at the beginning of your relationship, you and your partner can agree on how the assets are to be divided if things do not work out.
SMART WAY #4: Evaluate joint bank accounts. If you simply ignore your joint bank accounts, you may find that your spouse has taken all the money.
SMART WAY #5: Cancel joint credit cards, lines of credit and loans. This should be done as soon as possible, or you could be responsible for large bills run up by your spouse.
SMART WAY #6: Protect yourself from joint loans. As part of a marital settlement agreement, your former spouse may be required to pay a joint loan. However, no matter what the agreement says, you are still liable to the lender. You should protect yourself by notifying the lender that this is the case and trying to obtain a release, if you no longer need that credit facility. If you are unable to obtain a release, ask the lender if it is possible to freeze the credit facility, assuming you don’t need access to it. Or ask your lender to notify you if your spouse defaults in payment, so that you can institute timely legal action against your spouse.
SMART WAY #7: Inventory property. A complete and accurate inventory of your property and your spouse’s property will ensure that the property gets divided fairly.
SMART WAY #8: Use Mediation. Mediation is often the most cost-effective way of settling the legal issues when you separate. As well, you and your spouse are more likely to stick to a mediated settlement than a court order, which will save you from going back to court again and again in the upcoming years.
SMART WAY #9: Secure jewelry, artwork and other valuable moveable objects. Valuables have a way of disappearing when a relationship breaks down. If you believe this may happen, you should take steps to protect your valuables.
SMART WAY #10: Ensure that separate property remains separate. Certain types of money – such as life insurance proceeds, inheritances and personal injury awards – may not be divided upon separation. To ensure that this is the case, keep these monies separate from other monies. While it may be tempting to use a large inheritance to pay down your mortgage, doing so creates a potential accounting nightmare that will prove terribly expensive.