No one wants to think that divorce is in their future. Many times, it is not, but that does not mean you should not have a plan in place. That could seem counterintuitive to building a strong relationship. Yet, knowing that there is a plan in place can give you confidence. There are several factors to think about when it comes to financial tips before divorce.
At Zeigler Law Group, LLC, we can provide you with guidance on New Jersey asset protection even if you are nowhere near thinking about divorce.
Why Financial Preparation Matters – Even If Divorce Is Not Imminent
Financial preparedness is a core part of building long-term financial stability. Investing in a few steps now protects your assets later, even if divorce never happens. Financial preparation now can offer protection, clarity, and peace of mind.
One of the most important concepts for married people to realize is that protecting assets does not mean a lack of trust. In fact, it is not a sign of marital distrust but rather careful planning for the worst-case scenario. Without a plan, there is limited confidence in what may be possible later.
Remember, a part of being financially responsible for your future means having the hard conversations now. This does not mean you are being negative or planning for the worst outcome, but rather taking steps to ensure you are both knowledgeable and protected.
Separate vs Marital Property – Know the Difference
An important starting point when planning for the future is understanding what the law considers marital property, which is property that you both own equally, and separate property, which is property that just one person owns.
New Jersey is an equitable distribution state. That means that any property acquired by the spouses during the marriage is considered marital property. In the event of a divorce, the court divides this property according to what each person needs or what is equitable (not equal).
Separate property is assets that are not subject to division. It is often assets that one person brings into the marriage, such as investments or real estate that they previously owned. Some types of separate property include assets received during the marriage. That might include an inheritance left to one person or gifts one spouse received.
It is possible to protect assets in the event of a divorce, which are either marital or separate property. For example, the use of a prenuptial agreement allows for a clear division of assets to be made prior to the marriage. You can put a postnuptial agreement in place if you are already married but want to agree on how assets might be divided in the event of a divorce.
Whenever possible, work together to create a plan that fits your needs. For example, if each person brought in their own business started prior to the company, ensure there is a prenuptial agreement that keeps those assets divided if that is fair. If one party contributes to the business of the other during the marriage, that could impact what is considered fair.
Open and Monitor Financial Accounts
Another way to protect assets before divorce is simply to keep track of them. Consider these tips:
- If assets are separate property, do not combine marital assets with them. Open a separate account to manage those assets. If you keep them in the same account, there is no way to divide them later.
- Make sure you know what is on the other person’s credit report. You should have clear communication about spending, saving, and investing.
- Open joint accounts in which both parties contribute equitably to pay for expenses related to the family unit.
Being financially transparent can be tough, especially if you are entering into a new marriage. Yet, by taking these steps, you minimize the risk that there will be conflict later that could put your marriage on the line. Focus on documentation of what you own, ownership of it if it is separate property, and where you stand financially.
Avoid Commingling
Commingling assets means putting them together in the same account or using them for shared expenses. If you have separate assets, such as an inheritance from a family member, that you put into your jointly held checking account, those funds are comingled. That means that it might not be possible to separate those assets out if there is a need to do so. This is most important in situations of inheritance, gifts, or pre-marital assets that only one party owns.
Use Prenups and Postnups as Planning Tools
As noted, the use of prenuptial agreements can help you gain clarity before you get married. You should discuss financial goals and create a plan before marriage. Postnuptial agreements are much the same, but both parties must agree to them after the marriage is in place.
Consider a Trust or Other Estate Planning Vehicles
There are times when more aggressive strategies may be necessary to reduce at least some of the risk to assets. For example, if your parents left you an inheritance that you want to pass down to cover your child’s college education, putting those funds into a trust could help.
It also helps to have a clear estate plan in place that allows everyone to know what is expected should something happen to the relationship. Work with an attorney to create a New Jersey asset protection plan to protect yourself.
Get Professional Advice Early: Contact Our Toms River Divorce Lawyers at Zeigler Law Group, LLC
Whether you are concerned about separate property vs marital property or you are unsure of what to do to alleviate financial concerns heading into your marriage, seek help. Call our Toms River divorce lawyers at Zeigler Law Group, LLC at 732-361-4827 or contact us online to schedule a free consultation. Located in Toms River, Red Bank, Princeton, and Mount Laurel, New Jersey, we serve clients throughout Ocean County, Monmouth County, Mercer County, and Burlington County.