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If you plan to be married, it is in your best interest to protect your assets in case of a divorce. You would much rather be financially sound than devastated if a divorce does occur. The primary way to protect your assets is to locate an Estate and Trust Attorney to develop an estate plan that includes a Will and either a revocable or irrevocable trust. The revocable trust will activate through the settlor’s death, and the surviving spouse will receive a life estate and income through the Will. The irrevocable trust may be activated to avoid probate, achieve tax advantages, or manage investments for the trust-maker, appoint a trustee, and name beneficiaries of individual trusts.
The estate plan should be developed to manage various assets, including life insurance, annuities, a stock and bond portfolio, real estate investment property, oil and gas property, and collectibles. This process is extensive but necessary to protect you in the event of a future divorce. An initial inventory of assets and liabilities will be created for each entity and contain the name and contact information, the account number, the advisor’s name of every financial institution, and the application and statements for each account. For real estate and oil & gas property or mineral lease, the deed, the HUD-1, and mineral lease for each property will be needed. For real property, the inventory will include the address or location, personal residence and rental property, raw land, and oil & gas leases. Collectibles such as art, vehicles, guns, jewelry, gold, and silver coins will require appraisals and documentation. Ownership interest in businesses, including Secretary of State formation documents, will be needed. All this data will help establish a starting net worth prior to marriage. It should be kept in paper form, scanned into digital format, updated, and kept in safekeeping.
If a prenuptial agreement arises, this information will be already gathered and ready for the attorney of your potential spouse.
Hypothetical Scenario: A wealthy father remarries, and the new spouse refuses to sign a prenuptial agreement. After three years, the spouse becomes disenchanted with her sickly spouse and wants a divorce, citing incompatibility. Before marriage, the father was advised by his attorneys and financial advisors to segregate separate property and the earnings from his investments to keep community property funds from commingling with his separate assets. He also maintained records of separate and community assets and income. The spouse knew about the separate property records in their residence, which disappeared from their home when the father was away. This did not detour her forensic accountant, who analyzed the digital records maintained in a secure cloud service. Documents need to be kept in more than one place.
If you need a forensic accountant to help your estate and trust attorney gather separate property evidence or to trace separate and community property, call Sage Investigations, LLC at 512-791-5827 or email Edmond J. Martin, Chief Investigator, at edmartin@sageinvestigations.com.
