The following subject matter focused on divorce-linked asset distribution reasonably enough applies to every impending-ex demographic.
That cuts a wide swath, of course. Many younger couples in Massachusetts and elsewhere (we’ll just quickly pop in those oft-cited Millennial and Gen-X references here) cut marital ties in relatively quick fashion after voicing “I do” vows. And the baby boomer crowd has been notably spotlighted in recent years for a divorce propensity that materially exceeds all other age groups.
Those divorce clusters are materially different in many respects, but they typically share one core concern during the dissolution process.
That is this; They want to get what they see as rightfully theirs when their marriage legally ends and they embark solo on a new chapter of life.
That translates to a spotlighting of assets accumulated both prior to and during marriage. Evidence suggest that, as regards that, Millennial couples largely are different from older married and destined-to-divorce parties.
Here’s how: Reportedly, legions of them are less than willing to commit to a “we’re in this together” financial arrangement during marriage. A recent national survey indicates that the ratio of Millennials determined to keep their finances completely separate from their spouses is more than double that of similarly thinking Gen-Xers and boomers.
Notably, many of them think that doing so will keep them sheltered if the proverbial push comes to shove concerning asset distribution in a divorce.
That is dangerous thinking, say commentators weighing in on expectations versus realities relevant to divorce-tied property division.
Why just saying it’s separate property doesn’t make it so
Many divorcing parties falsely conclude that separate property always retains its original form. Here’s why that assumption is flawed:
- Use of separate property for a common marital purpose (e.g., a home improvement) can change its status to a marital asset
- Mixing (legally “commingling”) a separate asset with jointly controlled assets can similarly relabel property as marital
The bottom line is that a “mine, yours and ours” approach to asset identification and management during marriage might seem to keep things safety compartmentalized and safeguarded, but that can never be safely assumed. Any number of factors can arise over time to shift property from a “separate” to a “marital” category.
How can a spouse optimally identify and protect separate assets?
Parties thinking about asset protection should above all else be timely in their considerations. That often means taking safeguards before marriage and systematically during a union. Here are some things to focus on:
- Negotiating and executing a prenuptial agreement (or potentially a postnuptial contract during marriage)
- Taking concrete legal steps to identify and safeguard things like business ownership and an inheritance before exchanging vows
- Rigidly adhering to a policy of no-commingling between separate and joint accounts
- Maintaining accurate and ongoing records of relevant documentation
The false hopes often harbored by individuals who simply believe that declaring an asset as “separate’ ensures such classification can easily lead to a dire and unforeseen outcome in a divorce decree.
It doesn’t have to play out that way. Many proactive parties who timely secure proven legal help fashion happier endings upon marriage termination.