How to Protect Assets from Divorce in Ohio

Divorce is a significant life event that often raises concerns about asset division. In Athens, Ohio, the process of dividing assets during a divorce can be complicated, especially when substantial assets are involved. Protecting your financial interests during a divorce requires careful planning and understanding of Ohio's divorce laws.

K. Robert Toy Law Office is here to provide insight into how you can safeguard your assets. Keep reading to discover both common strategies and lesser-known tactics for protecting your wealth. Whether you’re anticipating a divorce or want to be prepared, here are tips that knowledgeable family law attorneys in Ohio recommend.

Ohio's Equitable Distribution Law

Ohio follows the principle of equitable distribution during divorce. This means that assets and debts are divided in a manner that the court deems fair, which doesn’t necessarily mean equally. Marital assets, generally those acquired during the marriage, are subject to this division. However, the classification of property as either marital or separate is a critical factor in how assets are distributed.

Separate property—which can include items like inheritance, gifts to one spouse, and property owned before the marriage—generally remains with the original owner. To protect your assets, it's crucial to understand what is considered separate versus marital property. Family law attorneys can guide you through this distinction.

Prenuptial and Post-nuptial Agreements

One of the most effective ways to protect your assets from divorce in Ohio is through pre-nuptial agreements or post-nuptial agreements. A pre-nuptial agreement is signed before the marriage and outlines how assets will be divided in the event of a divorce. If you didn't sign a pre-nuptial agreement before marriage, you can still enter into a post-nuptial agreement.

These agreements can define separate property, address spousal support, and determine asset division in case of a divorce. They’re especially useful for individuals with significant assets, business interests, or inheritances. Family law attorneys can help make sure these agreements are legally sound and enforceable under Ohio law.

Protecting Business Interests

If you own a business, it's essential to protect it during a divorce. In Ohio, businesses started during the marriage or whose value increased due to marital efforts are considered marital property. Without proper safeguards, your spouse may be entitled to a portion of the business's value.

A business valuation will likely be conducted during the divorce process to determine the value of the business at the time of separation. To mitigate this, you can:

• Establish a pre-nuptial or post-nuptial agreement that outlines the business as separate property.

• Consider creating a buy-sell agreement with your business partners, which can limit your spouse's claim to the business in the event of divorce.

• Keep detailed records of the business's finances and separate them from personal assets to avoid mingling.

Family law attorneys often recommend setting up a trust to protect business assets, which can help shield the business from division during divorce proceedings.

Trusts and Asset Protection Structures

Using legal structures like trusts is another method of protecting assets in divorce. Trusts can shield assets from being classified as marital property if structured correctly. Family law attorneys often advise clients to establish a revocable trust before marriage or a domestic asset protection trust (DAPT) during the marriage to hold certain assets separately.

The key is making sure the trust is created and managed properly, with clear documentation showing that the assets are separate from marital property. Trusts can include real estate, business interests, and even future income, making them a robust tool for asset protection.

Keeping Inheritance and Gifts Separate

While inheritances and gifts are typically considered separate property in Ohio, they can be classified as marital property if they’re commingled with marital assets. For example, depositing inherited money into a joint bank account or using it to purchase jointly owned property may make it subject to division in a divorce.

To prevent this, it's crucial to keep inheritances and gifts separate:

• Open a separate bank account for any inheritance or gift funds.

• Avoid using inherited assets to pay for marital expenses or investments.

• Keep detailed records to show the origin of the assets.

Family law attorneys recommend maintaining thorough documentation to prove that these assets should remain classified as separate property in the event of a divorce.

Managing Debt in Divorce

While much attention is placed on protecting assets, it's equally important to consider debt during a divorce. In Ohio, marital debt is also divided equitably between spouses. This means that credit card debt, loans, and mortgages accrued during the marriage could be split, regardless of whose name is on the account.

Family law attorneys recommend strategies like:

• Reviewing credit reports and debt obligations to understand the full scope of marital debts.

• Paying off high-interest debts before filing for divorce.

• Avoiding new debt before the divorce process begins.

These steps can help protect you from being unfairly burdened with debt after the divorce.

The Role of Financial Forensics

In challenging divorces where significant assets are involved, family law attorneys may recommend the services of a forensic accountant. This professional can track down hidden assets, identify instances of financial fraud, or assess the true value of intricate assets like stocks, bonds, or investment properties.

Forensic accounting is especially valuable when one spouse controls most of the finances or there are suspicions of hidden wealth. Ohio courts take a dim view of spouses who try to hide assets, and the discovery of hidden assets can lead to an unequal division of property in your favor.

Retirement Accounts and Pensions

Retirement accounts and pensions are often overlooked but can be a significant part of marital property in Ohio. Family law attorneys help make sure that these assets are properly valued and divided. A Qualified Domestic Relations Order (QDRO) is required to divide pensions and other retirement accounts during a divorce.

To protect your retirement savings:

• Understand how much of your retirement is considered marital property.

• Work with a family law attorney to get the QDRO drafted correctly.

• Consider offsetting retirement accounts with other assets to keep your retirement savings intact.

Seeking Professional Advice Early

It's never too early to seek professional advice about protecting your assets. Family law attorneys stress the importance of financial planning, especially for individuals with substantial assets. Engaging with an attorney early on can help you understand your options, such as pre-nuptial agreements, trusts, or business protections.

Many individuals mistakenly believe that asset protection begins once divorce proceedings are initiated. However, it’s far more effective to engage in asset protection strategies before problems arise. Being proactive can help you retain as much of your financial stability as possible after a divorce.

Protect Your Assets With Help From a Legal Professional

By taking early action and understanding how Ohio's family law courts approach asset division, you can better protect your financial future. Each case is unique, and a tailored approach with the help of professionals can make all the difference in securing your assets throughout Ohio, including in Athens, Vinton, Jackson, Morgan, Washington, Meigs, Hocking, Fairfield, Perry, and Gallia. Contact K. Robert Toy Law Office today to keep your assets safe and where they belong.