How to Protect Your Assets During Divorce

Divorce can be a tumultuous and emotional time and protecting your financial assets is an important part of this process.  

Ensuring that you preserve your financial well-being during a divorce requires a clear understanding of your legal rights, careful planning and strategic actions.  

Below, let’s find out how you can secure your property and assets during this difficult time. 

Understand your financial situation

Knowing your financial details helps you identify all assets and liabilities. This includes real estate, investments, savings accounts, retirement funds, and debts. Accurate identification ensures that everything is accounted for and divided fairly. It is important you understand your financial situation as it will help you protect your assets by identifying any potential hidden assets or financial discrepancies that your spouse might try to conceal.  

Having a thorough understanding of your finances will also allow you to plan for your post-divorce financial future. This includes budgeting for living expenses, understanding your potential income and expenses, and planning for any financial adjustments you may need to make. 

For more information on property and finances, read this guide from Family Relationships Online.  

Separate you and your spouse’s finances

Maintaining separate finances can protect you from financial liabilities incurred by your spouse as you are less likely to be held responsible for their debts. Separation of finances can help shield your assets from being used to pay off your spouse’s financial obligations. Keeping finances separate can also prevent your spouse from making unilateral financial decisions or manipulating joint accounts in ways that could affect your asset protection. Where possible, you should close any joint accounts and open individual ones. 

Update estate plan

To effectively protect your assets during a divorce, it is crucial to update your estate plan. Begin by revising your will, trusts, and nominated beneficiaries to reflect your new circumstances. In particular, the nominated beneficiary on your life insurance, superannuation fund and any investment fund need to be revised during the divorce process. These updates help ensure that your estate plan accurately mirrors your current wishes and provides the necessary protection for your assets. By doing so, you can ensure that your assets will be distributed according to your most recent intentions. 

Read this Canstar guide on estate planning for your future.  

Keep clear financial records 

Detailed and accurate financial records are invaluable in a divorce proceeding. They help in establishing the origins and ownership of assets, differentiating between personal and marital property. By keeping comprehensive recordsrecords, you can better protect your assets as it acts as clear evidence of ownership and will be used in the division of assets. It is strongly recommended you create a financial inventory for yourself and your spouse so that you can clearly keep track of and protect what is yours.  

Consider tax implications

Understanding the tax implications of dividing assets is important. For example, withdrawing funds from a retirement account or selling a property might have tax consequences. Being aware of these helps in making informed decisions and avoiding unexpected tax liabilities. It is advised that you seek assistance from a financial or legal professional prior to making any large financial decisions during a divorce. 

To learn more about the tax implications surrounding divorce, refer to this guide from the Australian Taxation Office.  

Binding financial agreement or prenup

A binding financial agreement, sometimes known as a prenup, can be entered into before, during or after your relationship. These agreements can specify how assets are to be divided between parties upon separation and can be tailored to each person’s specific needs, interests and goals. Prior to signing any binding financial agreement, you should consult with a legal professional who is experienced in family law to best protect your assets.  

Seek professional legal advice

To effectively protect your assets during a divorce, consulting with family law experts and financial advisors is essential. These professionals can offer personalised advice and assist in drafting the necessary legal documents to safeguard and maximise the value of your assets. Their expertise is crucial for navigating complex division of assets and any disputes surrounding that. Dettmann Phair Lawyers can provide valuable support and assistance throughout this challenging period and ensure your assets are protected. 

Court action

In most cases it is best to try and settle matters outside of court as litigation can be an expensive and stressful process. The court does have discretionary powers to make orders with respect to the division of property between parties going through divorce or separation in circumstances where they are satisfied that it is just and equitable to do so. 

Keeping You & Your Family Secure at All Costs

Protecting your assets during a divorce requires a combination of careful planning, legal guidance, and strategic actions. By understanding your financial situation, consulting with professionals, and taking steps to separate and safeguard your finances, you can navigate the process with greater confidence and ensure that your financial interests are adequately protected. 

As every divorce is unique, tailoring these strategies to your specific circumstances will be crucial for achieving a fair and equitable resolution. It is important to note that if you own a business or company, this adds greater complexity to any financial settlement and seeking advice from a legal professional is strongly recommended.  

Dettmann Phair Lawyers: Your Trusted and Experienced Legal Professionals

At Dettmann Phair Lawyers, our family law specialists have engaged in all forms of the dispute resolution process and can assist you with your family law matter.  

We have extensive experience dealing with divorce matters and have a proven track record of protecting our clients’ assets. 

To explore your options call one of our expert family law solicitors at Dettmann Phair Lawyers today on (02) 9412 4500 or complete our enquiry form online.