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Protecting assets during a divorce

On Behalf of | May 25, 2023 | Divorce |

Dividing financial assets is one of the biggest challenges that Michigan residents face when going through a divorce. Both parties actively strive to protect their assets and avoid financial ruin. It is generally inevitable that each party experiences some financial damage after the divorce. The objective is to minimize this financial damage to the greatest extent possible.

Your current financial situation

Protecting assets becomes challenging when you are unaware of their existence. One of the initial steps in safeguarding assets during a divorce is to identify and take ownership of the assets you and your partner possess. This includes savings, credit card statements, cryptocurrencies, 401(k) accounts and other investments. The better informed you are about your assets, the more effectively you can secure your financial future.

Avoid hiding money

Particularly in cases where trust is lacking between spouses, there may be a temptation to conceal money. However, attempting to hide assets in anticipation of a divorce generally leads to a more contentious process, higher legal expenses and negatively impacts one’s credibility before the judge. This does not imply that a person should neglect to preserve their assets, but rather they should be transparent and forthright about their actions throughout the divorce proceedings.

Separate bank accounts

If all of your money is in a joint account, your spouse could withdraw at all. If someone feels uncomfortable talking to their spouse about separating their accounts, they could withdraw half of their money into an individual account. Then, notify the soon-to-be ex-spouse about the process. Again, transparency is key.

Dividing assets during a divorce can be a challenge. However, with advanced planning and open communication, you can do it in a way that minimizes a negative impact on your finances.