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Early financial planning helps mitigate divorce impact

It may seem illogical to prepare for a potential divorce while also planning a wedding, but that is exactly what many pragmatic couples in Missouri and elsewhere are doing. High divorce rates make asset protection a concern in the event a marriage fails, and implementing strategies designed to mitigate exposure is considered by many to be a form of insurance they hope never to use.

There are a number of ways couples can insulate themselves from financial depletion if their marriage fails, but the gold standard remains prenuptial agreements. Any contract is only as good as its drafting, and this is especially true for both pre and postnuptial agreements. With careful wording and attention to equitable guidelines recognized by the courts, these agreements can streamline the divorce process and limit acrimonious litigation if things do not work out as planned.

Simply maintaining separate accounts can provide some protection and limit exposure both from divorce litigation and aggressive debt collection tactics employed by a spouse's individual creditors. Comingling assets makes them joint property, and couples must be diligent in recordkeeping and day-to-day practice. For example, using joint accounts to pay for renovations or maintenance to an individually titled asset can easily lead to the asset being adjudicated as joint marital property.

The same holds true for funding investment accounts from joint financial holdings. If property is brought into the marriage or inherited by one party during the marriage, adding the other party's name to a deed or title can lead to complications either in a divorce or in the event of an untimely death. For example, if an individual dies after becoming a joint owner, his or her surviving spouse could be left in an unwanted partnership with his or her children from a prior marriage.

Individual circumstances always dictate the best strategies in asset protection and divorce in general. Consulting a qualified family law attorney can provide someone with insight and guidance about the best way to approach any specific set of circumstances.

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