How to protect your assets in the event of divorce

Getting married is a happy occasion that many don’t want to mar with thoughts of divorce. However, as an estimated 42% of UK marriages end in legal separation, it’s a possibility to be taken seriously. As well as taking a toll on your emotions, divorce can affect your financial well-being, disrupting your lifestyle in the long term. Safeguard your financial future by following this guidance on protecting your assets in the event of divorce.

  1. Understand your financial position

Begin with a thorough assessment of your assets to understand your financial position. Gather all relevant documentation, including bank statements, property deeds and pension records, and create a comprehensive list split into types of assets. This should include your savings, liabilities (such as debts) and other potential sources of income such as investments.

Maintain this list throughout your marriage, regularly reviewing and updating it as your wealth shifts. Should you divorce, a detailed inventory will help you understand your net worth and a fair request for asset division, so you don’t get shortchanged in your settlement agreement.

  1. Seek financial advice from your solicitor

Engaging a solicitor specialising in divorce and family law is a crucial step during the dissolution of a marriage, but can be a useful safeguarding tool as well. Your solicitor can provide tailored advice on asset protection and division, ensuring all financial decisions are fair and comply with UK laws. This will help to ensure a smooth separation.

For complex financial situations, your solicitor can recommend reliable advisors who can shed light on challenging topics such as tax and offer strategies for post-divorce financial planning.

  1. Consider a prenuptial /postnuptial agreement

Prior to marriage, you can sign a prenuptial agreement which outlines how assets should be divided in case of divorce. This is often employed when partners have vastly different finances. A similar process, known as a postnuptial agreement, can be done after marriage.

These agreements are not legally binding in the UK, but they are increasingly given weight by courts if deemed fair. Such agreements can significantly reduce the uncertainty and conflict during a divorce as both parties have insight into their financial entitlements.

  1. Open individual bank accounts

If you currently keep your money in a shared account with your spouse, consider opening individual bank accounts to protect your personal savings. This gives you certain financial security in the event of divorce and prevents your funds from being used without your authorisation. Joint accounts rely heavily on trust which might disappear during a divorce.

Separating your funds early can also help you maintain a clear picture of your financial standing, giving you the confidence and ability to leave if you become unhappy throughout your marriage.

Be the first to comment

Leave a Reply

Your email address will not be published.