Divorce Asset Protection

Written by Rebecca Russell
Bookmark and Share

Weddings are incredible celebrations about the joining together of two lives. Both partners come to the nuptial table with two distinct backgrounds and prepare to merge them together into one. Almost every couple believes that marriage will last as long as they both shall live, but with the divorce rate climbing to almost 50 percent in the United States, one out of every two marriages will end in a separation.

Protection During a Divorce

Joining lives also means joining assets. For some individuals, it may be a good idea to protect those assets in the unfortunate event of a divorce. As an example, if a woman comes into a marriage owning a house that has been in her family for many years, the house remains in her name. Perhaps the couple chooses to move into that house and create a life there or perhaps the house is being rented as a source of income. Regardless of the use of the house, if the marriage results in divorce, the woman will want to be sure that she retains ownership of her inheritance.

There are several ways for the woman in this scenario to protect herself right from the start of her marriage. One of the most common is to transfer the house and any income associated with it into a Family Limited Partnership. All assets are then under the legal control of the partnership and not of either spouse. One member of the couple, most likely the wife in this case, is named General Partner, which will give her the right to control the property.

Should there ever be a divorce case, one member of the couple may decide to sue the other. In this case, if the husband sues the wife for her assets, the Family Limited Partnership will most likely prevent him from getting control of the house. A judgement in a lawsuit can only be against an individual and the assets in the Family Limited Partnership can not be used to pay the debt of either of the partners. By using a Family Limited Partnership, the woman has protected herself from losing her family home.

Bookmark and Share