Did You Know These 7 Assets are Safe From Divorce?
There are very few savings, assets or investments that are safe from divorce. Depending on how proactive you are in addressing some of these items will determine how much you get to keep in the future versus what you may need to share if your marriage dissolves down the road. Another potential opportunity is looking at something today with no cash value but may have a deferred value in the future. Another potential opportunity is an asset that is restricted by a third party contract.
Assets Before The Relationship
Any assets that either party brings into the relationship is not subject to marital division if the family unit breaks down in the future. Both parties are privileged by these same rules. If you have a ledger of all your assets before being deemed legally married (married or common law), it would be prudent to keep statements just before the union. This will make things infinitely easier to identify if the marriage ends in divorce.
Personal Loans
Another asset that can be argued to be excluded from divorce asset splitting is any personal loans from third party individuals that earmark funds only if the marriage remains intact. An example is if one set of parents gifts a large sum of money or property to the couple to put against the purchase of a home. The parents can stipulate that the money only becomes the couple’s property if the marriage remains intact. If the marriage dissolves, the one spouse can argue the value of the loan should be taken out of the mix of the marital assets. Again, both parties should sign a contract to understand that the loan terms are subject to the union remaining in place.
Trusts
Trusts are contracts put in place that prevent individuals from accessing granted money all at once or deemed to be given over time. Lawyers set up trusts to protect the interests of the family setting up the trusts. Assets that may have been acquired by proceeds of the trust, i.e. house, vacation properties etc., are marital assets and thus subject to its division after a marital breakdown. If an individual receives an annual income from a trust, that income amount can likely be argued for spouse and child support purposes. If the trust proceeds are distributed at the discretion of a trustee, it may be more difficult to argue as a marital asset and subject to division.
