In this article we’ll discuss ways of protecting your finances throughout your divorce.
When getting a divorce many people are concerned about their finances and are looking for ways to protect them. When you have a long and complex financial history with someone however, it can be daunting to try and figure out what you should be entitled to.
In order to protect your finances, it’s important that you take steps to do so as early as possible, even if this is before the divorce application. This gives you the opportunity to better understand your financial situation and consider different options for example, a pre-nuptial agreement, spousal maintenance payments and seeking the assistance of a solicitor.
There are a number of ways to protect your finances during a divorce, and some things to avoid entirely. Learn more below…
Contact Your Bank and Any Loan Providers
It’s wise to contact your bank and loan providers when you are getting a divorce. Speaking to a professional regarding a joint account or joint loan can help you to take action as early as possible.
For example, you may need to freeze a joint account so that everything in it is protected until it can be fairly divided between you and your spouse.
Pre-Nuptial and Post-Nuptial Agreements
If possible, getting a prenup (before marriage) or a postnup (after marriage) agreement can help you to protect your assets in the event of a divorce.
Having a pre-nuptial agreement may not be an option if you are already married however having one would allow you to specify what will happen to your assets in the event of a divorce. This can include finances, pensions, businesses, etc.
A post-nuptial agreement can be made after you are married. This will help you to make choices regarding what will happen to your finances during a divorce. Allowing you to protect your financial assets.
Is it Possible to Hide Finances During a Divorce?
Some people attempt to hide their financial assets during a divorcee as a way of protecting them. However, in the UK not disclosing all of your financial assets within a divorce can result in penalties.
In most cases a family solicitor will be able to easily identify finances that an individual may be trying to hide. If this happens, it’s possible that the court will order you to pay your spouse’s legal fees or give them more of your assets during the divorce.
Because of this, it’s important to always be upfront and honest about all of your finances, even if you are trying to protect them.
Can You Transfer Money Before a Divorce
Transferring money before a divorce may sound like a good way to protect your finances but this can do more harm than good.
If you are transferring money before you divorce, it’s important to think about whether it may be considered trying to hide your financial assets. If the court thinks you are trying to stop your finances from being taken into account during a financial agreement between you and your ex-spouse, you may face financial penalties.
Before transferring money before a divorce, we recommend speaking to a divorce lawyer to find your best options moving forward.
It can however be beneficial to transfer money between you and your spouse in anticipation of a divorce, though again you should discuss the implications of this with your lawyer.
Protecting Your Pension
Your pension can be a significant financial asset and as such it’s important to protect it throughout a divorce.
Depending on the value of your pension and the amount accumulated before the marriage you may be able to use negotiation and mediation to protect it by excluding it from financial agreements during a divorce.
If you are unsure how to protect your pension during a divorce, we recommend speaking to a PODE or Pensions on Divorce Expert or other professional in order to assess your options.
Protecting Finances with a Trust
A trust can sometimes be used to protect financial assets during a divorce, however if the court believes a trust was created with the sole purpose of protecting finance in a divorce the have the power to remove it.
A trust that has been made transparently and for the correct reasons can be easily justified to the court. Speak to a professional if you are concerned about finances placed in a trust.
Protecting Finances During a Divorce
When protecting your finances during a divorce its important to do so fairly. If the court believes you are trying to exclude large chunks of your finances in things like trusts and transfers, they will retaliate.
The best way to protect your financial assets is to always speak to a professional before making a significant financial decision that could be seen as hiding your assets. Other methods such as negotiation and mediation are great ways to fairly protect your finances whilst still splitting finances reasonably during a divorce.
Please be advised that this article is for general informational purposes only. Be sure to consult a family las solicitor if you want to protect your financial assets in a divorce. We are not liable for risks or issues associated with using or acting upon the information on this site.