A sad reality is that many marriages fail. Some marriages are hostile, others not so much. Many wonder how you can protect your money in a divorce, even if it’s only a few thousand!
13. Get a team
As soon as you receive confirmation that your spouse wants a divorce, you need a team.
This team isn’t just your legal one, but also an emotional one too!
The best divorce lawyer in the world can only get a half of the job done. You will probably hit the proverbial “Rock bottom” of your emotions. So you need people you can trust to be around you!
Perhaps you will rely on close relatives, like your parents, siblings and perhaps even cousins! Or, you might rely on a close friend that you can confide in, and can reassure you when times are bad!
You may also want to consider getting an accountant or banker in your team too, who can help you with the financial aspect when you are trying to protect your money in a divorce!
12. Make a plan
Now you’ve got your team, you need to make a plan!
Perhaps, your lawyers and financial experts need to talk it over without you, in order to make it so they are on the same page first. Perhaps, they won’t.
You should also be making arrangements with your friends. You’ll need to be thinking about where you’re going to sleep if your spouse kicks you out the house.
You may also want to make arrangements regarding how they can support you. Are they going to have lunch with you each day? Are they going to come round every evening?
You’ll also want to make a plan about what will happen to your kids in all of this- will they be made aware, or remain unaware of the situation? If you do make them aware, make it clear that they are not to take sides.
10. Stash your valuables
This is by far the most obvious way to protect your money in a divorce.
If you have reason to suspect that your spouse will try to hurt in a more sentimental way, this could be for you!
Opening something like a safety deposit box might be a good, although pricey idea if you want to protect your money in a divorce.
Other good places to stash your valuables could be in your work office, at a friend or relative’s house, or even in a safety deposit box in one of their name’s (make sure you trust them first!)
Note: If you store anything of value, eg. jewelry, bond certificates/stocks, heirlooms etc. you will have to present them during the proceedings (your legal team can advise you on this in more detail!)
9. Get a family member/friend to ‘gift’ you some money
People often talk about having a secret divorce stash, just in case they end up in a divorce and need money to cover legal proceedings, living expenses etc.
The general consensus is that this is generally a bad idea. This is often due to fact that the divorce stash is often subject to an equal split between the two of you, and is often a source of contention when it’s found out!
So, let’s reinvent it!
Yes, have that secret stash of money stored up, preferably in a personal bank account that isn’t your main one. Let’s say that you then get the divorce paperwork come through.
You then ‘gift’ your chosen family member/friend the amount in your account, and then get them to ‘gift’ it back to you. The reasons for the gift could be something like:
- ‘Friendship anniversary’
- Birthday
- Late present of some kind
- Just because
Note: Discuss this with your legal team prior as this may cause issues regarding disclosures which may prove messy for you!
8. Get a PO box
If you are forced to move out, or don’t want to chance your spouse from finding things like new bank information, you may want to consider opening up a PO box at your local post office.
This means that you will have an address in which you can receive mail from banks, your employer, your legal team and so on.
This go a long way when you are trying to protect your money, as it means that there is no way your spouse can access anything in it, either legally or illegally!
7. Try to decrease your net worth (slightly)
Personally, I’m not a big fan of this suggestion, however, I feel like I should include it anyway.
During a divorce, everything you and your spouse own is split equally. This means that if you are the primary breadwinner, or make up the most of your marriage’s wealth, you have the most to lose.
So why wouldn’t you want to make what you bring to the table worth slightly less.
Usually, I’d advise against buying a brand new car or taking a luxury holiday. But in this case, I’d actually encourage it.
Your spouse simply can’t take that holiday from you after you’ve already been on it. Plus, they won’t want to take on a liability in the form of a brand new car that is depreciating each month!
6. Close all joint accounts
Let’s face it, your finances are going to be a mess right now. Chances are that you and your spouse are looking to get as much money out of the divorce as possible.
If you have a joint account together, consider closing it.
First, inform your spouse of your intentions to do so. Wait until you receive a reply, and then withdraw half of the money out of the bank account (as this is often considered ‘reasonable’ by most attorneys!)
Tell your spouse that you’ve done so. Then, make sure you have somewhere else, that can adequately protect your money in a divorce…
5. Set up personal bank accounts
Perhaps you already have one, but it’s advisable that you open up one of your own. Make sure that this bank is separate from the bank that your joint account was with, and any banks that your spouse’s accounts are with.
It’s advised that you have multiple bank accounts in order to best protect your money in a divorce as this makes it harder to discern what you actually have.
However, CNBC will point out that doing this alone (if at all) is actually doing more harm than good when it comes to protecting your money in a divorce!
4. Set up an offshore/anonymous company
I will warm you here and now: In many countries, this may been seen as you trying to deceive the courts, and is often able to be reverted by the courts if done. If you want to do this, please consult your legal team.
However, if legal in your country, you have the possibility of setting up an offshore company in which to hide your assets.
Setting up these companies can cost anywhere from a couple of hundred dollars to millions depending on the firm, type of company and country where you incorporate!
If you are the owner of this anonymous company, you can safely relax, knowing that it can often be very difficult to prove ownership of the company.
However, in many countries where it is allowed, you are required to show that you are the owner, and may end up not making much of a difference, as your spouse can still split ownership of the company equally!
3. Try to get a prenup
Perhaps now is too late. But if you are at the beginning or are currently engaged, now might be the best time to start talking about a prenup.
Essentially, a prenup is a legal document that states that if you get a divorce, you are not looking to take any of your partner’s money.
If your fiancé(e) is happy to sign such an agreement, it will come in handy if you get divorced, as this will be used by a judge to deny alimony and the splitting of your estate!
If at all possible, I would recommend getting a prenup signed as this is the only sure-fire way to protect your money in a divorce!
2. Document everything before you file
If you are the one filing for divorce, it may be a good idea to document everything in excruciating detail.
Document how much your accounts are bringing in each month, your retirement accounts, investment apps/accounts and anything else that is increasing your net worth, or is a liability.
This protects your money in a divorce as you are able to get your fair share, if your spouse decides to try to report that they make more/less, have more/less debt, have more/less in retirement or investments accounts.
If you are on the receiving end of the divorce, you might also want to consider doing this too, in order to stop your spouse from doing it either!
1. Differentiate between marital and personal property
If you’re married, chances are most things are marital property. And it is really hard to prove otherwise…
I once had a business associate who was getting divorced from his wife. His wife wanted to take 50% of his business from him, a business he’d owned and operated since he was 16!
She claimed that his ownership of the business was technically marital property, and as such, it should be split equally between them. And the judge agreed too!
Had it not been the fact that his legal team could prove that he’d started his business three years before he’d even met his wife (and five before he married her), he would’ve lost 50% of his business to her!
You need to do the same. Generally speaking, anything that you’ve owned since before you met your spouse is considered personal property, as is any gifts you receive from friends and family!
Everything else is generally considered to be marital property!
Any other ways to protect your money in a divorce? Tell me in the comments!
