When a couple marries, they likely do not anticipate that the relationship may not survive. However, there are some steps that one can take to protect assets before a divorce takes a heavy toll on wealth. Taking steps to shelter wealth now can help Colorado residents avoid a financial hardship before vows are even exchanged.
According to recent statistics, the divorce rate has gone down over the past several years. However, it may still be prudent to take steps to protect assets and wealth before a marriage is in danger. If one partner or the other has significant assets, then setting up a trust may be the best method to ensure that children will inherit the assets before they could be subjected to division in a divorce proceeding. Also, passing a home down may best be done so through a trust as well. Having a third-party manage the trust may protect property from creditors or unintended heirs.
Once a divorce becomes inevitable, having a solid financial plan in place may prove to be invaluable. Trusts and other protections should be in place before a marriage is over, as any efforts to shift wealth right before a divorce may appear to a court as an attempt to hide or conceal assets from the former partner. It may also be beneficial to take a big picture approach to financial decisions so that short term goals do not interfere with long-range plans.
If there is a business involved in a divorce, having a contingency plan in place may also ensure the survival of that business for future generations. While no one enters into a marriage expecting to eventually divorce, preparing for that risk may make fiscal sense when there is significant wealth owned by one or the other partner. Colorado residents may seek further information from a family law professional who can offer the guidance and support that will best benefit one in his or her particular circumstances.
Source: kiplinger.com, “Strategically Thinking About Divorce“, Andrew Bass, April 5, 2017