It can be hard to know what to do when ending a relationship. The situation is complicated because people in relationships often have joint assets that need protection.
If you find yourself in a similar setup, it’s best to take the necessary precautions before parting ways. Just a few hours spent planning can save you a tremendous amount of time and money in the long run, helping to make sure that your finances are secured before your relationship is over.
This article will walk you through some of the most critical steps to take to keep your assets in check peacefully.
Verbal Agreement
A verbal agreement can be a risk, especially if there isn’t a written contract in place. But if you’re dealing with a partner you know and trust, it can be tempting to talk it out.
It’s essential to figure out who gets what and when before going separate ways. Otherwise, it could cause significant trouble down the road. If you’re not sure about what you should do, it might be a good idea to arrange a conversation in front of an attorney so you can have a witness at hand. Just be careful not to go on for too long, as you don’t want the conversation to turn into a full-fledged fight.
It’s also a budget-friendly option since it only requires the time of an attorney rather than their total fees.
List of Assets
Prepare to make a list of all the assets and debts you have. It includes all items, big or small, from your braided diamond engagement ring to your house and lot, bank accounts, and life insurance policies. You’ll then need to establish how ownership of each asset will be divided up between you and your partner.
It’s important to note that even if you’re the one who owns the property, if you and your ex-partner contributed equally to paying for it or making improvements to it, you can both be entitled to possession of that asset.
Creating a list of assets and liabilities will help protect your personal property and ease potential financial problems in the future.
Separation Agreement
A separation agreement outlines how your assets will be distributed after the relationship has ended. If children are involved, you will also need to look into child custody and visitation rights. You’ll then want to make sure that you and your ex-partner both sign and date the separation agreement.
A separation agreement is one of the most important documents you can draft, so even if you don’t think it’s required, ask an attorney to write up a formal document that specifies what will happen with your assets.
Doing so helps avoid confusion about who owns what if you don’t get back together. If you do get back together, there’s a chance that your assets will have changed or grown, so it can be helpful to make a new agreement with a lawyer before resuming the relationship.
Prenuptial Agreement
A prenuptial agreement helps to clarify things even further by resolving any issues that might come up about how property is divided during divorce. It can also help to prevent potential disagreements before they happen.
When you start a new relationship, it’s important to remember that anything you bring into the marriage remains yours if the relationship does not work out. A prenuptial agreement clarifies this point and the division of assets in case you get a divorce.
In some states, it’s possible to have a “no-fault” divorce, which means that neither party is at fault for the split. In these cases, courts will divide marital property equally between both parties. If you have a significant prenuptial agreement, the courts may be more likely to consider it during trials about your assets.
Property Settlement Agreement
In cases where a long-term marriage and children are involved, a property settlement agreement comes into play—even if there isn’t a prenuptial or separation agreement in place.
Most states and courts will prefer the property settlement agreement because it considers the children’s needs and circumstances and those of any other dependents.
This method is significant if you want to take steps to protect your children from any financial hardships that might come up after a divorce. It can help to protect your child’s interests without the need to go to court.
After reading this article, you should now understand the importance of protecting your assets during a breakup or divorce. By creating a list of your assets and liabilities, you can ensure that everything is documented correctly and there is no confusion about who owns what. You may also want to consider drafting a separation agreement, prenuptial agreement, or property settlement agreement to protect your interests further.