Author Topic: Shielding money from a possible divorce  (Read 3444 times)

WhoDey

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Shielding money from a possible divorce
« on: November 22, 2017, 07:29:32 PM »
Alright, just cut to the chase - marriage is a little rocky.  My parents provided me some money; $25,000 for investing, of which we split the profits 60/40.

My question is if we were to go down the divorce route - how can I keep this money out of my wife's hands.  Firstly, she knows about the money and secondly she thinks investing is stupid - so I don't think I owe her any of this.

Can I have my parents memorialize I this is their money, of which I am just investing for them?

Any help is greatly appreciated and of course divorce is a last resort, but I want to have my ducks in a row.

ShoulderThingThatGoesUp

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Re: Shielding money from a possible divorce
« Reply #1 on: November 22, 2017, 08:53:29 PM »
Don't fuck things up over $25,000.

mxt0133

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Re: Shielding money from a possible divorce
« Reply #2 on: November 22, 2017, 08:58:13 PM »
Regardless if there is a divorce or not.  If your parents provided you 25K to invest for them and did not give it to you.  Then the appropriate thing to do to protect their assets from any liability you might encounter is for them to open up an account in their name and give you the rights to access the account to make investment transactions.  That way the assets are in their name and you have the ability to make investment decisions, which they then pay you however they see fit.

Treat it like you are their financial adviser.  It's their account which you manage.  If you get sued, then your parents assets are safe because it does not count as your asset.  Similar situation in a divorce.

I'm a red panda

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Re: Shielding money from a possible divorce
« Reply #3 on: November 23, 2017, 03:28:29 AM »
One good piece of advice would be to not post things on the internet that her lawyers can find. It sounds like 60% of this is yours, not 100% your parents. So depending on your state laws, she would be entitled to it whether she thinks investing is stupid or not.

boarder42

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Re: Shielding money from a possible divorce
« Reply #4 on: November 23, 2017, 03:56:34 AM »
Sounds like you're stock picking. In which case your wife would be correct about her opinion on investing if stock picking is what she's been exposed to. Indexing is the way to go. Which your parents wouldn't need you to invest for them on. 

KBecks

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Re: Shielding money from a possible divorce
« Reply #5 on: November 23, 2017, 04:01:01 AM »
Spend a couple thousand on counseling and fix your marriage.   If you divorce, you will need to follow the laws in your state. Good luck.

Imma

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Re: Shielding money from a possible divorce
« Reply #6 on: November 23, 2017, 04:08:36 AM »
Just assuming you didn't sign a pre-nup?

Work on your marriage. Pay for counselling if necessary. Invest time and effort in saving your marriage. Listen to your wife's thoughts about investing - if you're really stock picking like someone else is suggesting, she might well be right. Take her opinions seriously and put your marriage before your ego. That you're looking to keep money out of her hands before divorce is even actually on the table says a lot about your priorities. Put stuff in writing with your parents. Is this a gift of money that you happen to invest, or are you investing their money for them? Did you declare this money as a gift from them on your taxes?

If this marriage can't be saved, get a pre-nup next time.

chasesfish

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Re: Shielding money from a possible divorce
« Reply #7 on: November 23, 2017, 10:23:07 AM »
I would be careful not to do anything that causes your hand to get slapped.

That being said, your parents could create documents backdated that called this a loan.

ShoulderThingThatGoesUp

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Re: Shielding money from a possible divorce
« Reply #8 on: November 23, 2017, 11:29:20 AM »
Looking at your past posts, you have a small child and you are trying to pick stocks. Don't hurt your kids life to pick stocks. Your wife is right if she wants you to stop picking stocks.

FINate

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Re: Shielding money from a possible divorce
« Reply #9 on: November 23, 2017, 12:16:58 PM »
Marriage isn't just a nice vow to love each other 'till death do us part. It's the formation of a new household, a legal entity. You can think of it as somewhat like a corporation of two. A lot of tradeoffs and intangibles go into marriage. For example, one person my raise the kids, saving huge amounts on childcare and freeing the other partner to focus on full time work. Who owns how much of the family's assets in this case? For this reason, unless otherwise covered in a prenup, all assets acquired during the marriage are considered marital property and divided as such during divorce.

Don't try to "shield" this from the divorce by giving it back to your parents. Transactions are all recorded and the courts will not look kindly to a big transfer before divorce.

When your parents "provided" some money to invest, by which I assume you mean they gifted it, that was an asset acquired during the marriage. They (or you) may be very unhappy about it getting divided as part of the divorce, but it was a goofy scheme to begin with. A gift is a gift, and so your parents should not expect to recover that money in the future unless it was documented as a loan at the time. And don't try to recast it as a loan after the fact...that's just asking for trouble.

If you do end up getting divorced then do the right thing and divide everything down the middle. The lawyers are the only ones that win if you guys start fighting about this in the courts.

justchristine

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Re: Shielding money from a possible divorce
« Reply #10 on: November 23, 2017, 05:07:45 PM »
Marriage isn't just a nice vow to love each other 'till death do us part. It's the formation of a new household, a legal entity. You can think of it as somewhat like a corporation of two. A lot of tradeoffs and intangibles go into marriage. For example, one person my raise the kids, saving huge amounts on childcare and freeing the other partner to focus on full time work. Who owns how much of the family's assets in this case? For this reason, unless otherwise covered in a prenup, all assets acquired during the marriage are considered marital property and divided as such during divorce.

Don't try to "shield" this from the divorce by giving it back to your parents. Transactions are all recorded and the courts will not look kindly to a big transfer before divorce.

When your parents "provided" some money to invest, by which I assume you mean they gifted it, that was an asset acquired during the marriage. They (or you) may be very unhappy about it getting divided as part of the divorce, but it was a goofy scheme to begin with. A gift is a gift, and so your parents should not expect to recover that money in the future unless it was documented as a loan at the time. And don't try to recast it as a loan after the fact...that's just asking for trouble.

If you do end up getting divorced then do the right thing and divide everything down the middle. The lawyers are the only ones that win if you guys start fighting about this in the courts.
I'm no legal expert but I don't think that is the case in every state.  I had a friend that just got divorced in which both parties received substantial sums from their parents during the marriage.  One spouse put their gift in a joint account with the other spouse.  The other spouse kept their gift in their name only.  Only the jointly held gifts were split up.  My advice to the OP, talk to a lawyer instead of random strangers on the internet

lhamo

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Re: Shielding money from a possible divorce
« Reply #11 on: November 23, 2017, 06:35:44 PM »
justchristine is correct -- if you are in a community property state and are gifted or inherit property and do not "comingle" it with your marital assets, you can often retain that 100% in the event of a separation or divorce.   It would need to be in a separate account in only your name, etc.

WhiteTrashCash

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Re: Shielding money from a possible divorce
« Reply #12 on: November 23, 2017, 07:27:28 PM »
Cash out the money and then put it into bitcoin or etherium or some other untraceable online currency. I wouldn't recommend that action for any other reason, but it might help you in your case.

FINate

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Re: Shielding money from a possible divorce
« Reply #13 on: November 23, 2017, 07:58:22 PM »
Of course, seek qualified legal advice. And yes, it all depends on the state and how things are structured. Not clear how much time you've spent managing these investments, but if you're actively trading that is essentially like having a side hustle/job. While your wife is doing other things (running errands or whatever) it frees up your time to trade. IMO, the ethical thing is to at least split the proceeds. It's a small amount compared to risk of an acrimonious split.