If you are a high-earning professional like a doctor, lawyer or CEO of a large corporation, you likely realize you have a lot to lose in the event of a divorce. In a community property state like California, it is especially important to protect your valuable assets as
Ideally, you will have a strong prenup in place in the event divorce becomes necessary. But too few couples take advantage of the legal protections prenups provide. Read on for some asset protection tips for high asset couples facing divorce.
Shield your wealth through valuation
An example of the way valuation can be used to your advantage in divorce is a doctor implementing a certain type of benefit plan for their medical practice. Non-qualified plans are funded over time, with the initial value very low for the first five years and then the value accelerating quickly. Planning your divorce for the period of low valuation is recommended.
Make illiquid investments
Annuities and cash value life insurance policies may have little value now but will accrue nicely later. There are also other illiquid investments that high-income earners may want to consider making before seeking a divorce.
But keep it legal
Attempting to stash assets to avoid dividing them can get you into a great deal of trouble. Just don’t do it. Keep in mind that even in a 50-50 state like California, property settlements can be constructed quite creatively to achieve that parity. If the parties reach accord on their own, most family law courts will sign off on the property settlement agreements. Your San Jose family law attorney can help you find workable solutions.