Divorce-Proofing Real Estate Assets Through Estate Planning
Going through a divorce is a tumultuous time for many reasons, not the least of which is the possibility of losing your hard-earned assets. If you wish to protect your real estate ventures from the possible effects of divorce, estate planning can be an excellent tool. Make sure to speak with an experienced St. Louis estate planning attorney for legal guidance.
Trusts
Creating a trust and structuring it properly can help divorce-proof your real estate assets in Missouri. With a trust, you can name the beneficiary who will receive the real estate assets if you do not want this party to be your ex-spouse.
Placing real estate in an irrevocable trust, for instance, can remove it from your direct ownership. This can keep the real estate outside of the category of marital property. Keep in mind that the assets of a 401(k) retirement account can only pass to someone other than your spouse upon your death if your spouse signs a notarized consent form.
Prenup/Postnup Agreements
By thinking ahead, you can protect your real estate from divorce with a prenuptial agreement. This is drafted prior to your marriage and goes into effect on the date of your union. If it is after the fact, you can also create a binding postnuptial agreement. Both of these documents can form rules for how real estate assets will be divided and shared in the event of a divorce.
You can combine your prenuptial or postnuptial agreement with your overall estate plan. If you wish for a prenup to take effect on the date of either spouse’s death, for instance, your estate plan can include a clause to make this happen. You and your spouse can both give up your “elective shares,” or the right to claim a share of the estate regardless of what is in a will or trust.
Business Entities
Estate planning also provides a way to protect your real estate assets by transferring them into business entities. You could transfer the ownership of the property to a limited liability company (LLC), which will shift ownership from you individually to your business. This can make it more difficult for your ex-spouse to directly claim the property.
A business agreement can also restrict the transfer of shares or membership interests to nonfamily members, allowing control of the property to remain within the family only. Another option is transferring the property into a family limited partnership (FLP).
Gift and Inheritance Planning
In a divorce case in Missouri, the only property the courts are allowed to divide is “marital property.” This does not include gifts or inheritance directly given to one spouse during the marriage (known as separate property).
Transferring real estate or property to your children or other heirs during your lifetime can remove it from your marital estate while keeping you in control of who inherits. It will also keep it safe from division in the event that the beneficiary gets divorced.
How an Estate Planning Attorney Can Help
Without proper planning, your real estate assets may be split and divided with your ex-spouse as part of marital property in a divorce case. Tailoring and perfecting your estate plan early on in your marriage or even before you get married can provide a strong legal groundwork that guides you and your assets safely through a divorce.
You can use estate planning as a shield to protect your real estate assets and preserve you or your chosen beneficiaries as the owners. A proactive estate-planning strategy can minimize the risk of your real estate assets being shared with an ex in divorce proceedings in Missouri. To get started, contact TdD Attorneys at Law LLC to discuss potential strategies with our estate planning lawyers.