How to Protect Assets from Divorce

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How to Protect Assets from Divorce

Divorce can be a challenging and emotionally turbulent process, often accompanied by significant financial implications. One of the most pressing concerns during divorce proceedings is the protection of assets.

Whether you’re navigating the complexities of separation or proactively safeguarding for the future, understanding the strategies to protect your assets is essential. While divorce laws can be complex and individual circumstances differ, there are several proactive steps you can take to safeguard your assets.

Our panel of family law solicitors are well aware of the emotional toll going through divorce proceedings can take on couples and their children. Our experts work hard to take away some of the stress from divorcing couples by providing them with expert legal advice regarding the financial implications of divorce. Please get in touch today to find out more about our services.

What am I entitled to in a divorce settlement in the UK?

What you are entitled to in your divorce settlement will depend on the circumstances of the divorce. Matrimonial assets are typically the part of the settlement that is the most up for debate. Matrimonial assets can be acquired by either party during the length of the marriage or with income earned while being married.

Generally, the two most significant matrimonial assets are either party’s pension and the family home. Other matrimonial assets can include:

  • Banked finances and savings accounts
  • Vehicles
  • Real estate properties
  • Investments and stocks
  • Businesses

Anything that was owned prior to the duration of the marriage is considered as premarital assets. Non-matrimonial assets are typically excluded in a divorce settlement unless the matrimonial assets do not add up to a sufficient amount for either party.

How are assets divided in a divorce?

In the UK, divorce settlements typically aim to achieve a 50/50 split for both parties. However, this split is not always achievable due to other circumstances that arise, meaning that one party will receive a larger proportion of the matrimonial assets than the other.

The Court must consider several factors included in section 25 of the Matrimonial Causes Act 1973 as well as the Civil Partnership Act 2004 when dividing assets in a divorce. This includes the financial needs and income of each party, as well as the family’s standard of living enjoyed prior to the divorce.

In terms of income, if either party has high earning potential, then this will be accounted for. The income is then considered against the financial responsibilities that each party has or will have in the future.

Finally, if the conduct of a party to the marriage was particularly severe and it would be unfair to disregard it, then this will be taken into account. This is typically for cases of domestic abuse with long lasting effects.

How to protect assets from divorce

Protecting assets from divorce in the UK involves a combination of proactive measures and strategic planning. While divorce laws in the UK aim to achieve fair settlements, there are steps individuals can take to safeguard their assets. Here are several strategies to consider:

  1. Prenuptial Agreements (Prenups): A prenuptial agreement is a legal document created before marriage that outlines how assets will be divided in the event of divorce. While not strictly legally binding in the UK, courts increasingly consider prenups, especially if both parties entered into the agreement willingly, with full disclosure, and with the benefit of legal advice. A well-drafted prenup can clarify asset ownership and protect assets acquired before and during the marriage.
  2. Postnuptial Agreements: Similar to prenups, postnuptial agreements are created after marriage and can outline how assets will be divided in the event of divorce. While less common than prenups, postnups can still provide a level of asset protection if both parties agree to its terms voluntarily.
  3. Trusts: Setting up trusts can be an effective way to protect assets from divorce. By transferring assets into a trust, they are legally owned by the trust rather than the individual, which can make them less vulnerable to being divided during divorce proceedings. However, it’s essential to establish trusts well in advance of any marital difficulties to avoid allegations of attempting to hide assets.
  4. Financial Disclosure: Full and honest financial disclosure is a legal requirement in divorce proceedings in the UK. Failing to disclose assets can have serious consequences, including potential penalties from the court. By fully disclosing all assets and liabilities, individuals can ensure transparency and fairness in the division of assets.
  5. Separate Property: Keeping assets separate from marital assets can help protect them in the event of divorce. This can include assets acquired before the marriage, inheritances, gifts, and assets held in one party’s name only. Keeping clear records of ownership and avoiding commingling marital and separate assets can strengthen claims to asset protection.
  6. Legal Advice: Consulting with a family law solicitor with experience in divorce and asset protection is crucial. A solicitor can provide tailored advice based on your individual circumstances, help you understand your rights and obligations, and assist in drafting legally enforceable agreements.
  7. Business Protection: If you own a business, taking steps to protect it from divorce is essential. This can include having a shareholder agreement in place, clearly defining each spouse’s role in the business, and considering options such as buy-sell agreements or insurance policies to provide liquidity in the event of divorce.

By taking proactive steps and seeking legal advice early on, individuals can better protect their assets from the uncertainties of divorce. While there is no foolproof method to guarantee asset protection, careful planning and consideration of the above strategies can help mitigate risks and secure a fair outcome in divorce proceedings.

How can solicitors help to protect your assets in divorce?

Solicitors specialising in family law can provide tailored legal advice based on the specific circumstances of your case. They can assess your assets, liabilities, income, and other relevant factors to develop a strategy for protecting your assets. They can draft pre and post nuptial agreements to protect assets and outline how they will be divided in the event of divorce.

Solicitors can negotiate with your spouse’s legal representation to reach a fair and equitable settlement regarding the division of assets. They can advocate on your behalf to protect your interests and ensure that any settlement reached reflects your contributions to the marriage and your financial needs post-divorce.

Family law solicitors can help ensure that assets are accurately valued during divorce proceedings. This includes properties, businesses, investments, pensions, and other assets. Accurate valuation is essential for determining the equitable division of assets and ensuring that each party receives a fair share.

If negotiations fail to reach a settlement, solicitors can represent you in family court proceedings. They can present your case effectively, advocate for your interests, and provide expert legal guidance throughout the litigation process.

They can also facilitate mediation or other forms of alternative dispute resolution to resolve issues related to asset division amicably. These approaches can be less adversarial and costly than litigation and may lead to more satisfactory outcomes for both parties.

Our panel of divorce solicitors

Our panel of friendly and professional divorce lawyers have the expertise and experience to deal with your case professionally and with empathy. They will guide you through the divorce process, helping you to make the difficult decisions in an understanding, non-judgmental manner.

Our panel of divorce solicitors and experienced family law firms will help you to navigate a range of issues and disputes, such as financial arrangements and will assist you in reaching an agreement on such issues.

Each solicitor we work with is authorised and regulated by the Solicitors Regulation Authority (SRA)

If you are wondering how to protect assets from divorce, our panel of family law solicitors will provide pragmatic legal advice and assistance, guiding you through every step of the process.

Please note we are not a firm of solicitors. We maintain a panel of trusted and regulated legal experts. If you contact us in relation to a case, we may pass your case on to a panel firm in return for a fee from our panel firms. We will never charge you for passing on your case to a panel firm.

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