Picking out wedding rings and signing divorce documents may seem worlds apart to many New Jersey citizens, but high divorce rates are leading many to consider divorce planning right alongside wedding planning. While some consider it cynical, pragmatic couples who want to protect assets from divorce litigation see such planning as a type of insurance they plan on never using.
Pre- and post-nuptial agreements are very common vehicles for divorce planning, but they are not the only tools in the box. Keeping separate investment and checking accounts can aid in providing insulation from divorce settlements if a marriage fails. Following a separate accounts strategy requires both good record-keeping and discipline. Any co-mingling of assets could result in individually held assets being later classified as marital property subject to division. For this reason, couples should keep a joint account used to fund household expenses, buy groceries and pay joint bills. Account statements from investments or other financial holdings should be kept to show their value at the time of marriage.
Extra care should be given to any actions regarding real estate or expensive personal property. Adding a spouse’s name to ownership documents can backfire in the event of divorce or an untimely death. Any property or other asset inherited by one party during the marriage should be kept separate from the other unless one wants to put it at risk in an unforeseen future divorce proceeding. Estate planning can be somewhat simplified by the maintenance of separate property and accounts. If one party has individual debts subject to collection, adding him or her as a co-owner puts that property in potential jeopardy if aggressive collection tactics are pursued.
Divorce and asset distribution conversations are never easy, but early planning may help limit future headaches in a divorce. An experienced family law attorney may be able to provide an overview of applicable law and guidance regarding individual needs to navigate a challenging circumstance.