In 1994, Canada’s annual divorce rate was 12.9 divorces per 1,000 married persons. In 2019, this has fallen to only 7.5 divorces per 1,000 married persons.
However, there is still an enormous number of people who want to know how to protect your assets in a divorce. The short answer is that every situation is different. However, there are also some consistent principles that tend to help people manage the divorce process more effectively.
If you don’t know how the legal system manages assets during a divorce, you might be caught off guard after it is too late to do anything about it. Read on to learn all about the most crucial things to understand about protecting your assets during a divorce!
Understand Marital Property When Getting a Divorce
When people are getting a divorce, they often find it difficult to focus on things like finances. However, putting aside your stress to learn about protecting your assets is an investment that can pay off for many years to come. The first thing to understand about assets during the divorce process is the idea of marital property.
Nonmarital property is generally exempt from the divorce process. Although you might have to negotiate hard to hold on to certain marital property assets, you can rest easy when it comes to non-marital property. So how can you know which of your assets are marital property or not?
According to Canadian law, assets are considered marital property if they are acquired by someone in the marriage during the marriage. It doesn’t matter who acquires the property or in whose name it is.
Of course, this applies to more than just physical assets like real estate or valuable items. It also includes things like investments, pensions, and bank accounts.
If you are beginning the divorce process, you might want to think about everything you owned before you got married. In most cases, you won’t have to worry about splitting those things up throughout the divorce process.
Take an Inventory of All of Your Divorce Assets
With this done, you will want to make a thorough inventory of all of your marital property. It is often a good idea to start with the most valuable assets your marriage owns.
Depending on your situation, you might find it difficult to remember every asset you have. However, as long as you account for the largest ones, you won’t be too surprised by all types of divorce negotiations.
Some people forget to account for debts when they are making a financial inventory. Keep in mind that the debt you acquire while married is also considered part of your marital property.
Once you have all of the assets and debts you own in front of you, consider ranking them in order of importance to you. In some cases, you will find certain assets that mean more to you than to your spouse. That gives you the perfect opportunity to get more value during the divorce process without diminishing the value of what your spouse receives.
Handle Divorce Problems by Establishing Separate Bank Accounts
As soon as you know you are getting a divorce, it is a good idea to set up separate bank accounts. The sooner you start separating your finances, the easier the process will go. That goes double because comingling bank accounts can make it difficult for even expert legal professionals to figure out exactly who should own what after a divorce.
Consider Getting a Marriage Contract
During the divorce process, many people end up wishing they had invested in a prenuptial marriage contract. At this point, it is too late for you to establish some of your property as nonmarital property. However, in some cases, it is not too late to set up a postnuptial agreement.
The main reason experts recommend prenuptial agreements over postnuptial ones is that your spouse will have a much better chance of fighting a postnuptial agreement.
For one thing, many courts will decide that postnuptial agreements are made under duress. After all, many spouses are concerned about the consequences of refusing to sign a postnuptial agreement. It is vital that you can discuss serious financial issues with your spouse.
However, just because postnuptial agreements are less airtight does not mean that they are worthless. If you have substantial assets to protect, you might consider asking your spouse for a postnuptial agreement.
However, it is vital that you are as transparent as possible with your spouse throughout the postnuptial agreement and the divorce process. Failing to disclose important information to your spouse can invalidate postnuptial agreements. It can also cause courts to look less favourably on your side of the issue during the divorce process.
In fact, it is often wisest to aim at the fairest possible outcome for both you and your spouse during a divorce. Although it can be tempting to try to fight to get a better deal for yourself, this strategy can often backfire. If a court decides that you have been unfair with how you deal with your spouse, they may award them more of your marital property.
Find Legal Help for Surviving a Divorce
All of these are general principles that apply to almost every divorce situation. However, you will need a custom plan to handle the unique factors of your divorce situation. Although it can be helpful to start with these tips, you will also want to find expert legal help so that you can achieve the best outcome possible from your divorce.
You may find it helpful to look at reviews to help you decide which divorce lawyer in Canada might be the right choice for you.
Know How to Protect Your Assets in a Divorce
Knowing how to protect your assets in a divorce is vital to make sure that a difficult situation does not become even worse. It is more than worth taking the time to invest in a deeper understanding of how assets are managed during the divorce process. In many cases, finding legal help is necessary to ensure the best outcome possible during a difficult divorce.
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