If the family assets are titled to a spouse who is likely to incur liability, are these assets lost to that spouse in divorce?

A common, simple asset protection strategy is to title marital assets with the less-vulnerable spouse. This spouse then controls the assets and can sell, encumber or conceal the entrusted assets. That’s one reason why titling marital assets with one spouse is poor planning. Spouses should jointly control marital assets.

For asset protection they might, for example, hold title as tenants-by-the-entirety or as general partners in a family limited partnership. If only one spouse has title to the assets, the other spouse should, at the minimum, encumber or escrow the assets to some third party or nominee entity, to prevent the sale or encumbrance of the property. Most state divorce courts equitably divide marital assets notwithstanding which spouse they are titled to.

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