How Can I Protect Family Wealth During My Divorce?

 Posted on February 10, 2021 in Complex Property Litigation

During a high net worth divorce, spouses will not only want to make sure their own financial interests will be protected, but they may need to take steps to ensure that other family members are not negatively affected by the end of their marriage. Those who come from wealthy families will want to make sure their family’s assets will not be lost during divorce proceedings. Spouses who have acquired significant assets during their marriage may want to ensure that certain assets will be preserved and passed on to their children or other family members. Business owners, executives, and those with large incomes may need to determine how to divide their marital assets in a way that will allow family businesses to remain in operation while making sure they and their families will have the resources they need in the years to come.

Wealth Protection Methods

The divorce process can be complex, and it often involves strong emotions and contentious disputes. This can make it difficult to determine how to divide marital assets fairly, and drawn-out divorce proceedings may end up using up a great deal of wealth that could be put to better purposes elsewhere. In many cases, the best way to make sure family wealth is protected is to take steps to do so before either spouse begins to consider getting divorced. Some ways that spouses can protect their family’s assets include:

• Marital agreements - If a person enters a marriage while owning significant assets, it is often a good idea to create a prenuptial agreement, which can specify how both community property and non-marital assets will be handled during a potential divorce. This can be a good way to ensure that existing family wealth is protected. For those who acquired valuable assets during their marriage, such as a business or professional practice, a postnuptial agreement can provide similar protections and decide how business assets and other property will be divided if a couple chooses to get divorced in the future.
• Asset protection trusts - To avoid the commingling of separate property owned by one spouse with community property owned by both spouses, assets may be placed in a trust. In most cases, a person will create this type of trust before getting married. By removing assets from their possession and placing them in the control of a trustee, they can ensure that these assets will be protected from division during divorce. When creating an asset protection trust, a person can provide instructions for how the assets should be distributed to beneficiaries, which may include themselves, their children, charitable organizations, or others.

Contact Our Austin High Asset Divorce Attorneys

If you are looking to protect the wealth owned by your family or other types of assets, the attorneys of Powers and Kerr, PLLC can explain your options and help you put the proper protective measures in place. If you need to determine how to divide valuable assets during your divorce, we can provide you with representation, help you negotiate a workable divorce settlement, or advocate on your behalf during complex property litigation. Contact our Austin property division lawyers today by calling our office at 512-610-6199.

Sources:

https://www.forbes.com/sites/robertpagliarini/2014/05/15/how-to-protect-yourself-in-a-divorce-using-a-domestic-asset-protection-trust/?sh=415429823cb6

https://statutes.capitol.texas.gov/Docs/FA/htm/FA.4.htm