Protecting Your Assets Before You Divorce
by Arthur Andrews
Recently, two of my good friends were divorced and the outcomes could not have been more different, even though they lived in the same state, which happened to be a community property state. Here are their stories.
Commingling Assets in a Community Property State
John’s wife died 13 years ago and he remarried 9 years ago. The first thing he did after he remarried was to add his new wife’s name to all his assets, consisting of a home, a car, savings accounts, certificates of deposit, stock accounts, etc., to protect his wife in the event he should die.
Well, after 9 years of marriage, their relationship headed south and his wife filed for divorce.
John soon learned that his new wife could and did claim that because her name was on all his assets she was entitled to half of those assets. John had also received an inheritance from his dad a few years back which he put in a joint account and lost half of that money.
Maintaining Separate Assets
Matt my golf buddy also remarried after his wife’s passing 6 years ago but he was extremely careful not to mix his assets with his wife’s assets. He too wanted to protect his new wife in case he had an untimely death so he just added her to all his accounts as POD (Payable on Death) versus adding her as a joint owner.
Matt also sold his house before he remarried, as did his new wife, and they built a new home, which they put in both names.
Matt also received $125,000 in inheritance when his mom died. He bought a CD in his name only. When his wife filed for divorce she got half the house, which they sold and split the proceeds.
Ask an Attorney for Advice
So if you’re getting married for the first time, second time or third time DO NOT add your new wife or husband to your financial accounts.
Laws vary by state so please consult with an attorney before you tie the knot. Protect your assets so you don’t end up like my friend John.
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