protecting your assets from divorce

this was someting i was just brainstorming about…no i’m not married, however everyone talks about protecting their assets with LLC’s, S-Corps etc.

what if i were married (w/out a prenup)…could i prevent the ex from getting my stuff if they are owned by an LLC or whatever else?

once again this was just something that crossed my mind and was thinking about how it would work. something tells me the lady can still get half your stuff…ahhh gotta love marriage laws!

I’m not an atty and I don’t play one on TV.

but I think that if you marry in a community property state without a prenup, everything that was “mine” becomes “ours” and would be split 50/50.

an entity wouldn’t help you, as your membership/ownership of the LLC would be split, too.

Ryan are you getting married?

PRENUP!!! Is about the only way to get around that I think!

haha no chance! as a matter of fact my lady of 2.5 years has now went her own way. i guess this is what spurred the thought. if i was indeed married to her, and she dipped out…damn would that hurt.

she did cash a $180 check of mine…i look at that as cheap divorce! ;]


This varies from state to state. Basically, you need to meet with an attorney in your state. What you want to ask about is a pre-nup to protect your corporation. Some states suck and you can only protect the pre-marrriage part of the company. If it grows into an empire during marriage, you split that growth. So…find a good state to get married in :slight_smile:

Divorce is expensive, been there done that twice! I can laugh now. My final wife believes in investing in real estate and is very supportive, everything we have made we have made together. She says the 'third times the charm.

Protect yourself.


I am a CPA, not attorney. I live in California, which is a community property state. Any assets that you own before you are married, remain yours as long as you don’t commingle them. Anything you inherit while you are married remains your sole and separate property as long as you don’t commingle them. Prenups are the way to go, but if you don’t then don’t commingle any previously owned assets or inherited assets.

I wonder if anyone has considered just getting married and staying married? Maybe committment is part of the answer.


23 years and still smiling. Of course it took a time or two to get it right.

Da Wiz

Instead of becoming a divorcee, how about becoming a widow? No property split and you get to keep the insurance money too!

I’m NOT an attorney, and therefore I am NOT offering you legal, financial, psychological, medical, or other advice.

In thinking about this, I would ask an attorney-- hypothetically speaking of course-- If I had a brother, another partner, or trusted person: could I transfer assets to that person with the understanding that after a divorce I would be able to buy it back?

Now, the risk of course is that you could end up like Michael Jordan and his Wizards deal. Where he gave up ownership to play, and his partners stabbed him in the back and didn’t give the ownership (or sell the ownership) back to him.

In the middle of a divorce, or bankruptcy-- this might be considered “fraudulent conveyance”, but I wonder what would happen if you were the one filing and/or had some other “heads up” in order to do it prior to the divorce being filed?

Just a thought, but if you still have control of the ownership (forcing partners to reconvey to you), then how did you give it up in the first place? Sure you could agree verbally, but I doubt that a written agreement to that effect would hold up in court.

Also, there may be tax ramifications on the transfer itself (gift tax).

The term “fraudulent conveyance” usually refers to the transfer of assets into another entity AFTER the proceedings of a lawsuit or other court judgement. Effectively the court can simply reverse the transaction. I would imagine that the court could also rule a transfer just prior to a divorce as such if they can prove that your intent was to protect it from your ex-spouse.

There are two ways to protect assets when you get right down to it–

  1. Don’t own them

  2. Encumber them

The first I’ve already eluded to. The second might work well for us as real estate investors. Paper them up-- create and sell notes using the property you wish to protect as collateral. Make your assets worth zero or less-- thus unattractive to the plaintiff.

Then you can compromise in the divorce settlement. Explain that technically, half this debt is yours-- but I’m willing to accept the full burden if you will relingquish any claims to the assets. Attorneys, who must act in their clients best interest may advise the plaintiff to go with that proposal-- especially if the name on the note is “Gweedo’s Fast Cash”.

When the settlement is final, have your C corp buy the debt from your cousin and forgive it.

Forgive me. I grew up in Cook County (Chicago)


Listen to that man from Chicago. Big Al would be proud. Good job, Paul.

Da Wiz

One other thing to keep in mind is child support. Family courts are heavily biased in favor of the custodial parent (CP). In the overwhelmingly majority of cases, the wife is the CP and the man becomes the NCP. NCP’s generally get raked over the coals when it comes to child support issues. Just something else to consider.