Several strategies are available for keeping your spouse from taking an unfair portion of the marital assets. Mainly, the key is to keep separate assets separate and prevent them from commingling with marital assets. Some steps you can take to protect your assets in a divorce include:
- Signing a pre- or postnuptial agreement
- Keeping separate bank accounts
- Providing accurate information and documents regarding your financial situation
- Hiring a divorce attorney to represent you in asset division proceedings
Our family law attorneys can explain how courts approach the distribution of assets in a divorce, prepare you for this process, and advocate for your best interests.
Distributing the Assets in a Divorce in Alabama
According to the Alabama State Bar, the goal of the court in dividing property in a divorce is to “do equity” between the parties. Alabama courts generally prefer that the parties work out their property distribution by agreement because they know their assets better than anyone else.
The American Bar Association (ABA) explains that most people eventually enter into a written marital settlement agreement that distributes the spouses’ debts and property. The document will list all the property that each spouse receives and who is responsible for each debt.
A written settlement agreement usually lists the separate property of each party and identifies it as separate. This list prevents an allegation that the parties forgot to include those items in the marital property distribution. The agreement will state that each party gets to keep their sole and separate property.
Marital Assets and Separate Assets
The court starts the property distribution process by determining which assets are marital and which are separate. Generally, assets people acquire before marriage are separate property. In addition, certain types of assets a person might obtain during the marriage could be separate property. For example, inheritance and some gifts received during the marriage can fall into this category.
The court will set aside to each party their separate assets. A spouse usually does not have a legal right to a portion of the other spouse’s separate assets.
When Separate Assets Convert into Marital Assets
The most common way a separate asset can lose its protection is if a spouse jointly titles the asset with the other spouse or commingles it with marital assets. Here are some of the ways this can happen:
- A person bought a house when single. Eventually, the individual got married. Rather than sell the house and buy a new house together, the couple lived in the house purchased before marriage. The spouse who bought the house signed a quitclaim deed, making both spouses joint owners of the property.
- A spouse receives an inheritance of $20,000 during the marriage, then deposits the money in a joint bank account with their spouse or uses the money to make purchases for or pay off the family’s debts.
- After getting married, a person uses savings accumulated before marriage as a down payment on a house for the couple. Then, they title the house jointly.
Taking these actions can be the legal equivalent of giving your spouse half the value of the money or asset. As such, these actions can convert a separate asset into a marital asset that the court can then distribute as such.
What Happens If There Is a Prenuptial Agreement
If the parties entered into an antenuptial agreement, also called a prenuptial agreement, that will usually control the distribution of property in the divorce. Less frequently, spouses enter into a postnuptial agreement, which is similar to a prenuptial agreement but gets signed after the parties get married.
If you wish to enter into either type of agreement, you should seek legal counsel. Many prenuptial or postnuptial agreements get invalidated by the court because they do not comply with all the legal requirements.
For a free legal consultation, call (256) 302-8846
What You Can’t Do to Protect Your Assets During Divorce
Sometimes, people will try to hide certain assets to prevent their spouse from receiving a portion of them in the divorce. Hiding assets during a divorce is illegal. For this reason, you will want to talk to your lawyer before taking any actions like these:
- “Cleaning out” a joint bank account
- Closing a joint bank account
- Opening a “secret” bank account in the United States or another country
- Stashing cash in a safe or safe deposit box
- Withdrawing money from a joint investment account
- Withdrawing money from your retirement account
- Withdrawing cash from a whole life insurance policy
Cash flow can be a challenge during a divorce—particularly a contested battle that is likely to go to trial. It is usually best to talk with your soon-to-be former spouse about how the household bills will get paid until the divorce is final. If having that conversation is not a practical or safe option, your lawyer can seek a court order that addresses these issues.
Our Attorneys Can Help Protect Your Assets During a Divorce
Summit Family Law helps people going through divorce proceedings and other family law situations. You can call us today to find out how we can help you with asset division, custody challenges, and other aspects of your legal situation.
