Divorce Preplanning Strategies

Nobody marries with the expectation of failure. Married couples never contemplate that the person they once loved could later seem to be a stranger and perhaps even an enemy. Yet, statistics paint an ugly picture. Approximately four out of 10 marriages today end in divorce. In divorce proceedings, women lose financially, their standard of living may drop as much as thirty percent in the first year following a divorce. Men, may not suffer as great financially, however, they tend to lose precious time with their children.

One of the greatest contributors to divorce is the issue of "control" - either financial or personal. Who controls the bank account? Who sets the social agenda? When one partner to a marriage "controls", the other partner loses their sense of self. A divorce becomes imminent as they controlled partner tries to regain their self-esteem.

There are several simple and logical ways to protect yourself financially if you believe your marriage is in jeopardy:

ONE: Keep Non-Marital Assets Separate

Non-marital assets are not part of the assets divided in a divorce. Instead, they are considered the asset of either the husband or the wife and generally awarded to that person in a divorce proceeding. Categories of non-marital assets include: * property you inherit; * proceeds from personal injury awards (eg. Worker's compensation or accident proceeds); * items owned prior to marriage; and * gifts to one party rather than the family.

If non-marital assets are commingled with assets purchased or improved during the marriage, it may not be possible to claim the asset as yours in the event of divorce. However, some "tracing" of non-marital assets may be possible. For example, if a non-marital asset is sold during the marriage and the proceeds from the sale are used to purchase another asset, it may be possible to "trace" a non-marital interest in the new asset. For example, if a car owned before a marriage is sold during the marriage and the proceeds used to purchase a new vehicle, a party may be able to claim a non-marital interest in the new vehicle. To do so, it is very important to retain all documents demonstrating the sale of the asset and the use of the proceeds realized from the sale.

TWO: Establish Your Own Credit

Make sure your name is listed on all household accounts and investments. Establish at least one credit card in your own name. This will help to create an individual credit history. When you are on your own, you will have a better chance qualifying for loans, mortgages and credit cards. These are all important considerations after a divorce.

THREE: Review Your Financial Holdings Regularly

Maintain complete and separate records of your financial holdings such as bank accounts, IRA's, 401K, land purchases, and stocks. This includes assets in your spouse's name as well. You may wish to maintain copies of these records at your place of employment or in a safety deposit box in your name. Records have a way of disappearing after a divorce has been started.

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