Most California and Orange county divorce cases have assets at the core of the fight between the two spouses. The importance of assets to each of the spouse is paramount since the word assets is used to describe all kinds of properties, personal, commercial, and even business stakes. The reason both spouses are willing to give their all in divorce cases is because they are looking to have the largest amount of assets for themselves.
Increasingly, spouses have started to get into pre-nuptial (premarital) agreements to make sure that their assets are protected from that dreaded day in divorce court. Some spouses however cannot agree on pre-marital agreements to have their assets protected. Here is a list of a few other options that such spouses can use to make sure their assets are protected despite not getting into a pre marital agreement.
Make Sure You Keep Your Funds Separate
This step is fairly simple and will allow you to escape lots of complexities in your divorce case moving ahead. If you have separate funds that belong exclusively to you, and were in your possession before you got married, make sure you keep the money that you had prior to your marriage in an individual account. This will allow it to be easily distinguished from the joint assets.
Separate Your Separate Property
One of the most important things in the assets category tends to be property. Property is often the most valuable of all assets and therefore will be fought over with the most commitment by the spouses. The best way to make sure that you protect the property that you have had in your possession even before the marriage is to keep it separate from your joint property with your spouse. This is trickier than handling separate funds.
If you have separate property that belonged to you even before you got married, the best way to keep it away from your divorce proceedings is to manage all its expenses from money from your pre marriage wealth exclusively. Any use of mutual funds to pay off the properties recurring expenses could drag what should have been your exclusive property into your Orange County divorce proceedings.
Making A Trust To Protect Assets
One of the easiest ways you and your spouses can protect their assets is by creating a trust before marriage. A trust will mean that there is a clear determination by the spouses to keep some parts of the property separate. When a trust ownership is involved in assets cases of divorces, judges will be more willing to accept that the spouses intended to keep certain aspects of the assets separate from the division.
Gerald A. Maggio is a trained Irvine divorce mediator who has amicably resolved cases many cases out of court, as well as an experienced divorce and family law attorney. Mr. Maggio founded California Divorce Mediators in 2012 with the belief that although “not every marriage can be saved, every family can” and a mission to save families from the financial and emotional distress associated with traditional divorce litigation. California Divorce Mediators is located in Irvine, California, and serves the Orange County area and other counties in California offering divorce mediation, child custody mediation and mediation of other family law matters.
by Thomas D. Begley, Jr., CELA
- Grandchildren
Many grandparents would like to leave something to their grandchildren. Frequently, the grandparents have not thought of this idea, but are enthusiastic when it is presented to them. One way to remember the grandchildren in a Will is to leave a flat sum of money, i.e., $10,000 per grandchild, another is to leave the grandchildren a separate share. For example, grandparents with three children may want to divide their estate into four shares, one for each of the children and one to be divided equally among the grandchildren. Some grandparents want to establish trusts for their grandchildren and limit distributions for education. 529 Plans are also a popular idea for many grandparents.
- Gifts/Loans to Children
Frequently, parents have made gifts or loans to one or more children, but not to all children. The Estate Planning attorney should ask whether the parents intended the gifts to be an advancement against the child’s share of the estate and whether they intend the loans to be repaid from the child’s share of the estate. Frequently, these loans are not documented and often children make no payments or default rather quickly.
- Blended Families
A fairly high percentage of the population is engaged in a second or subsequent marriage. They have children by a previous marriage or marriages. Do the parents want to treat their children and stepchildren equally? If not, do they want to provide for their current spouse, and upon the death of the current spouse direct their estate to their own children? Do they want a portion of the estate to go outright to the children immediately upon death? Do they want their current spouse to have a life estate in the real estate in which the couple resides at the time of the first death? If so, who will pay the taxes, utilities and upkeep? Would the life estate end if the surviving spouse cohabits or remarries? Has a Prenuptial Agreement been signed? Should a Contract to Make a Will be considered?
- Disability
Is there a family member with a disability? If so, is that family member receiving or likely to receive in the future any means-tested public benefits such as SSI or Medicaid? If so, a Special Needs Trust should be prepared.
- Beneficiary Designations
The beneficiary designations on life insurance policies, annuities and retirement plans must be coordinated with the client’s estate plan. Clients should be advised to retitle any POD or TOD assets. IRA beneficiaries should be designated with a view toward rolling over and/or stretching out IRA distributions.
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