What Assets Are Protected from Divorce Settlements?

Going through a divorce is difficult and stressful, especially when it comes to dividing assets. No matter how amicable a divorce may be, no one wants to walk away with less than they are entitled to. With a thorough understanding of Kentucky divorce laws, you can understand which assets are protected from divorce and which are likely to be split between you and your spouse.

At John H. Ruby & Associates, we help clients navigate divorce with their future in mind. Call us at 502-895-2626 to start the process and figure out what you want to walk away with.

The Shield of Pre-Marital and Inherited Assets

Personal assets you owned before getting married, as well as those you inherited, are generally safe from being divided if you and your spouse part ways. Keeping these assets in your name alone is crucial. Mixing them with marital property—for example, adding your spouse’s name to the deed of a house you inherited—could make them subject to division in a divorce. 

This is why maintaining clear boundaries between what was yours before the marriage and what you’ve acquired together is so important. If an asset is clearly just yours, either because you had it before you got married or it was given just to you, like an inheritance or a gift from someone other than your spouse, it’s likely it will stay yours in the event of a divorce. Know that you will likely need to prove your claim if your spouse attempts to declare these assets marital property.

Gifts, Trusts, and Other Exceptions

Gifts and assets placed into a trust can sometimes have a safety net against being divided during a divorce. If you received a gift solely for you from someone outside your marriage, it usually remains yours alone. Similarly, trusts set up to protect certain assets can also provide a secure boundary, ensuring those assets don’t get mixed into the communal pot that is up for division. 

The key here is to maintain these assets separately from your shared marital assets. Combining them, which is known as commingling, could potentially open them up to claims in a divorce. For example, dumping inheritance funds into a joint savings account or using marital funds to pay for the upkeep and improvement of an inherited home can muddy the waters during your divorce.

Navigating Complex Assets and Debts

Dealing with items like businesses, properties, or stock investments during a divorce gets tricky. These aren’t simple assets you can easily split down the middle. These assets may fluctuate in value over time, be subject to specific regulations determining who can and cannot own them, or have costs associated with them that any owner must be prepared to pay. While we always recommend having a Louisville divorce lawyer when your marriage is ending, it is especially important when you have complex or highly valuable assets.

Legal Tools and Agreements That Protect Your Assets

Certain legal tools can protect your assets. Prenuptial and postnuptial agreements are well-known options. A prenuptial agreement is set before you marry, detailing what happens to your assets if the marriage ends. While it cannot address issues like child support and child custody, a prenup can specify which assets and sources of income go with each spouse in the event of a divorce. A postnuptial agreement is similar, but it is drawn up after a couple is already married, often in response to marital troubles that require one spouse to make the other feel safe again.

Trusts can also protect assets, although this isn’t always the case. For example, it’s common for wealthy families to keep their assets in trusts to protect them from division in a divorce and to protect them from creditors should financial troubles arise. When a trust is involved, the trust itself is the owner of the asset—not an individual person or couple.

Start Your Divorce Case with John H. Ruby & Associates

As you prepare for this next step in your life, make sure you have the legal support and resources you need to protect yourself. Let’s discuss your options and come up with a plan to help you start your post-divorce life. Fill out our online contact form or call us at 502-895-2626 to get started.