Posted by: Vernon Ready
If you sense that the end of your marriage is approaching, you may want to do everything you can to prepare for a divorce. While you may feel vulnerable at this time, do not leave your assets vulnerable, even if you and your spouse signed financial agreements before your marriage.
If your spouse has an experienced attorney, he or she can find holes in your prenuptial agreement. Leaving your assets exposed may leave you paying more than you thought after your divorce – possibly even for the rest of your life. The best defense is preparation. Use these tips and strategies to keep your assets protected during a divorce settlement.
Understand Colorado’s Divorce Policies. Colorado is an equitable distribution state. This means that a judge will take a good look at your contributions, assets (marital and separate), and financial situation. After all marital property is appraised, the judge will attempt to split the property fairly. Property is not divided based on “fault.” It does not matter if one spouse “caused” the divorce or not. Keep this policy in mind while assessing and preparing your assets.
Look Over the Sworn Financial Statement. When you get divorced in Colorado, you will have to give a judge a thorough look at your finances. This information is communicated through the sworn financial statement.
You can access and download the sworn financial statement at any time here. Look over the statement. It will require you to record your monthly budget and expenses. This statement will help the court determine how much alimony or child support needs to be paid, and to which party. Getting a head start on filling this statement out will give you a good look at your financial situation, and also what your future may look like.
Separate Joint Accounts. If you contribute to a joint account with your spouse, you may want to close it. The assets you acquired during your marriage will still be considered joint property, but having a separate, personal account may give a judge a better idea of your financial contributions.
Collect Proof of Personal Gifts and Inheritance. Since the court will attempt to appraise and distribute any joint property, you will want to make an inventory and appraise your personal, or separate, property. The following are considered separate property, and will not be considered in divorce settlements, as described in Colorado Revised Statute 14-10-113:
Keep in mind that if the value on any separate property increases during your marriage, the increase in value will be considered marital property. It is important to collect proof of separate property so you can keep it after your divorce, but it is also important to appraise the current value of the property so you can be prepared for how much of that property may be distributed.
Communicate with Your Spouse About Your Finances. This may be easier said than done, but it will prepare you for what your spouse is going to fight for during divorce proceedings. Go over any assets or accounts that you feel are most important to you or that you think you should obtain after the divorce.
Keep in mind that when you and your spouse agree property can be considered separate property, a judge will honor that agreement. Keep a written account of communication you have with your spouse, especially if your spouse claims certain property is yours and separate.
If you have access to a mediator, you may want to have this conversation in front of him or her. A third party witness of any financial agreements will come in handy during divorce proceedings.
Do Not Hide Your Assets. This process may make you apprehensive or nervous, but hiding your assets or conducting secret business will not help you in the long run.
During divorce proceedings, your spouse (and your spouse’s attorney) can attempt to gather thorough financial information from you, your bank, your employer, and so on. You may be subject to a deposition. If you withhold information about the value or location of certain assets, the court can find you in contempt of court and you could be sentenced to prison. If you lie under oath, you could be charged with perjury.
Consult a Family Attorney with Estate Planning Experience. While this may not be possible to do if you are in the middle of divorce proceedings of you anticipate a divorce soon, one of the best ways to protect assets is to engage in estate planning. Placing assets into the right kind of trust, for example, can ensure that they go to the person or institution you want rather than your ex. An experienced attorney will be able to look at your finances and tell you the best strategies for both protecting your assets and reaching an appropriate settlement with your spouse.
About the Author:
Vernon Ready is an award-winning Colorado lawyer with an in-depth understanding of all areas of family law, estate planning, and personal injury. His energetic and aggressive advocacy approach allow him to successfully navigate complex cases, including high asset divorce and complicated custody issues. During his time at the University of Colorado Law School, Ready won numerous awards for his trial advocacy skills. Since being admitted to practice in 2009, Ready has become well-known throughout Denver and the state for the passionate defense of his clients and his unparalleled understanding of the law.