Ontario’s Family Law Act provides that property accumulated during a marriage is considered a joint system of income, no matter...
Ontario’s Family Law Act provides that property accumulated during a marriage is considered a joint system of income, no matter which spouse acquires it. There are legal ways to protect property during a high-net-worth divorce. For example, the law recognizes prenuptial and postnuptial agreements as valid, but these tactics can become extremely complicated, even involving international law if an individual holds property outside of the country.
The dedicated legal team at The Riley Divorce & Family Law Firm is here for you 24 hours a day to help bring you peace of mind in knowing that your assets are protected. We could explore the role of asset protection trusts in high-net-worth divorces and how they further safeguard prized interests. The following are some of the strategies we employ.
Our team of lawyers could work with you to draft a prenuptial agreement—made before marriage—or a postnuptial agreement—made after entering a valid marriage. These agreements legally specify who owns which valuable assets to preemptively protect your interests in the event of a divorce. The law states that your spouse must independently retain their own lawyer, and property distribution cannot violate public policy, such as leaving one spouse destitute.
You must disclose your assets and liabilities at the time you enter the marriage, and you must note what is excluded from marital joint property, such as inherited assets. You must also agree on how to value property in the event of a future divorce. Perhaps you own a winter home or maintain an offshore account. You can specify in a prenuptial agreement that the law applying to that asset is the law of the jurisdiction. You can also utilize holding companies and international treaties to safeguard personal property in a divorce.
As a high-net-worth individual, your personal assets can lose their status as yours if you co-mingle them with joint assets after marriage. Adopting a method of accounting for them is essential. Our legal team could help you establish an irrevocable trust, which means your chosen assets are transferred to the trust as the new owner, and joint property laws do not affect them, safeguarding them should divorce occur. With these trusts, you can name third parties, such as your children, as beneficiaries.
You can also keep assets you inherited in a separate account or note in your will that they belong to you. If you purchase real estate or other large assets before marriage, you can have them titled to you, or you can designate a percentage of ownership to a new spouse.
If you purchase stock in a company before your marriage, you have the burden of proof to show the asset purchase agreement and equity valuation. If no joint effort between the spouses caused the stock to appreciate, the asset remains yours.
If you start a company after marriage, you must prove, through the board of directors’ minutes and other documentation, that your spouse did not contribute to the growth of the business. You can also consult a Chartered Business Valuer to enhance the impact of your claim. A lawyer from our team could further explain how to shield any valuable business interests during a divorce.
Every divorce situation is unique, and you should not navigate this complex time in your life alone. To fully understand the role of asset protection trusts in high-net-worth divorces, call us today to speak with one of our lawyers. The Riley Divorce & Family Law Firm is available 24 hours a day and could help you protect your assets in high-net-worth divorces.
The Riley Divorce & Family Law Firm
