How do I protect the other investments I owned before I got married?

Here is a top valuation issue every business owner should know before filing for divorce.

So we have the business covered, but…then the entrepreneur is concerned about the other assets – or investments.

6.      They might wonder - How do I protect the other investments I owned before I got married?

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There are a couple ways that you can protect your assets or investments that you owned before you got married. Most of the ways involve some planning prior to marriage. Pre nuptial agreements are one way to clearly establish how things get separated if you get divorced. Many times people will not necessarily want to do these at the beginning or before the wedding, so a post nuptial agreement is done during the marriage. But will both parties agree to the stipulations.

Many times I have seen some of the best planning done by very wealthy families who want to protect the wealth for each generation and want to preserve it from getting dissipated or lowered in a divorce. For example, there was one case where the house that the couple lived in was really owned by the wife’s parent’s estate and held in a trust that would not transfer until the parents died. So the couple was living in a beautiful house, and after the couple filed for divorce, the husband thought that the wife would keep the business and the husband would take the house, since they were worth roughly the same amount. The problem was, the couple didn’t really own the house. Now there are other issues when money to buy a house was gifted to another couple, but after the divorce the checks were clearly gifted to the wife only and therefore there was a portion of the house that was separate and a portion that was marital. Not as easy to figure out, right?

So you need to keep clear records of any “gifts” or inheritances, since these are separate property. One of the ways is to keep track of what you had prior to the marriage meaning keep the investment account statements and do not co-mingle your accounts. So if you have an investment account with $100,000 prior to marriage, set up arrangements with the financial institution that any income or dividends will NOT be reinvested in the separate account, but will be transferred and reinvested into a different account or a joint marital account. Because the income could be marital, but at a minimum the accounts would be easy to trace back to the time of marriage. This is one way to prevent the accounts from being co-mingled or mixed together and considered transmuted or converted from separate to marital. If the valuation expert doesn’t understand co-mingling or transmutation of property surrounding marital and separate accounts in your state and this is an issue in your situation, you might want to contact some other people who have dealt with these issues.

So, I am considering filing for divorce, but want to be prepared - What should I do next?

Give us a call! No really, you should reach out to someone who specializes in valuations for the purpose of divorce. There may be many valuation companies near you, but do they understand the divorce court system in your state? That would be a good first question to ask. Then see how many times they have testified. Are they trained as a mediator? Do they understand how to negotiate settlements with other experts?

My name is Melissa Gragg and I am a divorce valuation expert witness in St. Louis, Missouri. I work with business owners and entrepreneurs in every stage of the divorce process, whether in mediation, collaborative divorce or litigation. There are many questions and myths about what happens in a divorce when you own a business. If you have any additional questions or would like to talk about your specific situation, please give us a call or text us at (314) 541-8163 or check out our website at https://www.ValuationStLouis.com/

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