Protecting real estate assets in a divorce

On Behalf of | Aug 16, 2021 | Property Division |

New Jersey real estate investors may be concerned about the effects of a divorce on their portfolios and future business. For anyone, the end of a marriage can be a challenging time, with significant practical and financial consequences alongside the emotional and personal difficulties. During a divorce, all of the property considered to be part of the marriage is subject to equitable distribution, and this can include investment properties and businesses, especially if they are not dealt with in a prenuptial or postnuptial agreement. However, there are steps people can take to protect their assets during a divorce.

Advance planning may be key

Advance planning — ideally, before marriage — is often the best way to ensure that certain assets are kept off the table during a divorce. If a valid agreement excludes those real estate investments from property division, they are excluded from the pot of marital property. In addition, premarital assets and assets obtained through inheritance can also be considered separate property, so long as they are not commingled with marital funds during the marriage. Other options, such as forming a limited liability company, may also provide greater protection in a high-asset divorce, so long as this step is not taken shortly before the divorce with the use of marital property.

Prioritizing business assets

During negotiations over property division, entrepreneurs may wish to prioritize the future of their real estate assets. They may be more likely to agree to provide a greater portion of other assets in order to maintain the totality of their business in a settlement. This is essentially another form of buying out a former spouse to ensure that investment properties remain clear of divorce complications.

A family law attorney may provide individualized advice that reflects a business owner’s unique circumstances. There are different strategies that investors and entrepreneurs may pursue to help them protect their interests and achieve a fair settlement.

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