Are you getting a divorce? Don’t have a prenuptial agreement in place?
Don’t panic. There are ways to protect the assets that matter most to you. While you won’t be able to keep everything you and your spouse accumulated throughout your marriage, taking the proper steps now can help you retain control over a portion of those assets.
Here are nine steps you can take.
New York is a no-fault, equitable division of property state. Equitable division means the marital property will be divided fairly. Equitable does not necessarily imply “50/50,” and no two people will agree on what is “fair.”
If the divorce goes all the way to litigation, the judge will consider a broad range of factors when deciding how the property should be divided up. The non-marital property automatically goes to the spouse that owns it.
Knowing what part of your marital property matters most to you is helpful. Is it the business you built from the ground up? The marital home?
By prioritizing and sharing your priorities with your divorce attorney, you’ll empower your attorney to start crafting settlement offers that emphasize your ability to keep the parts of the marital property that matter most to you.
#2) Assemble Your Records
Are you 100% sure that property counts as non-marital property?
Your spouse may disagree, so you need to provide a paper trail.
The paper trail could include receipts, bills of sale, dated maintenance records, or anything else proving you acquired the property before the marriage. If the property was a gift to you and you alone, you might need to provide testimony from the gift-giver. You should provide a copy of the will if it was an inheritance.
Remember that taking certain actions with your property “comingles it” with the marital property, which means it loses its protected status.
Plus, you should know that all pensions, IRAs, 401Ks, and other retirement plans are always treated as marital property in New York.
#3) Assemble Your Team
Commit to hiring several professionals to help you handle your divorce.
You’ll need a divorce lawyer, a valuation professional, a forensic accountant, a tax accountant, and a financial advisor.
The forensic accountant will make sure your spouse isn’t hiding assets. The tax accountant can advise you on the tax implications of a proposed divorce settlement. A financial advisor can help determine what you stand to gain or lose if you accept certain compromises in your divorce settlement.
We often recommend hiring a therapist, as well.
#4) Watch for the Dissipation of Funds
Some spouses take a bunch of money out of the marital accounts and start spending them on gambling, alcohol, illegal drugs, expenditures on an adulterous partner, or going on a shipping spree. They’re attempting to devalue the assets out of spite or are reacting emotionally.
Either way, you’ll want a court order to stop this behavior. In addition, dissipation may be recovered by taking the same amount out of the assets and restoring it to the wronged spouse. However, this won’t be a dollar-for-dollar comparison as some of that money already belonged to the wrong spouse.
Of course, you don’t want to dissipate the marital estate yourself. Generally, you can pay basic and routine bills during a divorce but are discouraged from spending money on any “extras.” Once you have a separate bank account, you may spend your own income as you wish.
#5) Commit to Negotiating
Allowing your case to go to litigation is the fastest way to lose assets.
Anything is negotiable in a settlement. Settlement offers that would never develop in litigation are workable in negotiation. While a judge has to sign off on any deal, they will primarily look to see if it is legal under New York divorce law.
Want to keep control of your business? Negotiation is the best way to make it happen. Want to pay your spouse lump sum alimony instead of writing a check every month? Try to come to an agreement.
#6) Keep Your Emotions Out of It
Treat your divorce like the dissolution of a business.
Unless you are pursuing the at-fault divorce option that may be pursued in limited cases, the law doesn’t care if they cheated on you. The law doesn’t care that they were impossible to live with, emotionally unavailable, or a liar. There is no way to use the divorce settlement to “punish” your spouse for the pain you’ve been through.
Their behavior may be somewhat relevant if they dissipated assets on the same bad behavior that caused the divorce, this fact may be somewhat relevant. But for the most part, the courts don’t care how they acted.
Stay laser-focused on negotiating a deal you can live with.
#7) Stay Above Board
The quickest way to lose assets is to attempt to hide them.
Lawyers and forensic accountants are familiar with almost every trick you could use to hide assets. You will be caught. The courts will charge you with contempt of court and perjury. You’ll probably have to give those assets to your spouse.
Dirty tricks do not pay. Keep your behavior 100% above board. It will pay off.
#8) Deal With Today’s Reality
Don’t create divorce settlements based on what you think will happen. You think you or your spouse might attain an inheritance later. You believe that business might be worth ten million in the future, but it’s only worth $102,940 today.
Don’t let magical thinking ruin your divorce settlement. Look at what’s true today, and act accordingly.
#9) Accept Your Lifestyle Will Change
Nobody lives the same lifestyle after divorce. You will have to change your budget. You’ll have to give up some assets. Chances are alimony will be higher than you wanted or lower than you hoped for. You’ll have to pay child support.
Trying to keep everything the same for you while trying to take everything from your spouse won’t pay off as a strategy. Take a deep breath, understand you won’t get everything, and ask your attorney for the best and worst-case scenarios. Aim for something in the middle, and understand you will only get some of what you want.
Get Help Today
Need help with your divorce?
Work with an experienced divorce attorney. Eyal Talassazan has handled hundreds of high-net-worth divorces and can help you, as well.
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