There is often a lot of pressure that comes with a divorce, which if not handled correctly, can quickly overwhelm individuals and cause the situation to worsen.
No matter what the reasons are, both parties are often thrown into a difficult and uncomfortable position, as they struggle to process the emotional fallout of the decision whilst juggling the legal proceedings that go with it.
In many cases, these concerns extend much further than feelings of hurt or betrayal, as the question of assets and how they should be divided comes into play. Unfortunately, it’s the elephant in the room that if not properly addressed, can leave you in a precarious financial position moving forward.
Proactivity is key when it comes to avoiding such issues, so what steps could and should be taken to ensure your assets are adequately protected?
The different types of assets
When preparing for a divorce, there are two types of assets that must be considered, known as matrimonial and non-matrimonial assets.
Also deemed as properties, matrimonial assets are acquired during a marriage, and under UK law, both parties are entitled to a share of these assets regardless of who provided the funds. In some cases, assets that were acquired before the marriage can also be counted, such as property purchased as a family home.
Some of the most common matrimonial assets include; property, pension plans, investments, savings, cars, furniture and shared possessions. They are an important consideration during divorce proceedings, so it is vital that you understand which assets are classed this way.
Meanwhile, non-matrimonial assets are financial assets that have been acquired before the marriage. They commonly include inheritance, family businesses and property, and unlike their matrimonial counterparts, are typically excluded from the division process. That being said, their exclusion may not always be granted depending on the circumstances presented, so it’s important to seek legal advice for clarification if uncertain.
Prenuptial and postnuptial agreements
One of the most effective ways to protect your assets from a divorce is a prenuptial agreement. Commonly referred to as a ‘prenup’, this contract is made between you and your spouse before getting married, setting out who owns belongings, assets, property and money whilst detailing how it should all be divided in the event of a divorce.
Although they are not classed as legally binding, they have become a reliable means of protecting assets as long as they adhere to the following guidelines:
- Prenuptial agreements must be signed well in advance of a wedding to show it was not signed under duress.
- It must provide a full and frank disclosure of both party’s finances.
- Both parties must take independent legal advice before signing an agreement.
Another option is a postnuptial agreement, which as the name suggests, is made after you’ve married. Like prenups, these contracts make it clear as to how assets and property will be split, as well as detailing arrangements for your children, should a divorce occur.
Of course, these options are both precautionary and require forethought on both sides to be useful. If a prenuptial or postnuptial agreement has not been established, then there are other steps that can be taken to ensure assets are protected.
Avoid making hasty decisions
A common pitfall of those going through divorce proceedings is to make decisions in the heat of the moment, that although may seem sensible at the time, can lead to bigger issues later down the line.
Before reaching an agreement, it is crucial that legal advice is sought so that you receive a full view of your partner’s assets and a better understanding of how they would be divided in the eyes of the court. Attempting to go back on any hastily made agreements can result in mistrust and confusion during the early stages of proceedings.
The same goes for moving out of the marital home and away from your spouse or children. Although it may feel natural to remove yourself from the situation following a divorce, doing so could benefit the remaining party as they can argue they have a greater housing need as the main care of the children. Similarly, moving in with a new partner before finalising a divorce could put you at a disadvantage, as the financial circumstances of any cohabitee will be viewed by the court as a potential resource.
As tempting as it may be, you must also resist going through documents and accounts that belong to your partner. Logging into their email accounts or trawling through bank statements is not permitted and any evidence gathered will therefore be inadmissible. Transferring assets to third parties or moving them offshore must also be avoided, as these actions will be viewed as attempts to deceive the court.
Finding the right support
No matter how challenging the situation may be, it is important that you prioritise the protection of assets from the outset, leaving no stone unturned in your efforts to achieving a desirable settlement.
Of course, the reality of going through a divorce can be a lot to deal with, but complications stemming from a lack of proactivity will only intensify these issues when it comes to proceedings.
Take stock of your situation and remain cool headed in your approach – there are experienced family law teams at your disposal to guide you through the process and ensure an amicable solution.
