Safeguarding Family Wealth During Rising Divorce Rates
Photo by Nathan Dumlao
Last week we discussed how divorce rates were looming in Canada and across the world after COVID-19 hit. Sometimes – parents may also look at their own children’s marriages and fear that their children may end up in a divorce which may affect their estate planning decisions. A research study commissioned by Handelsbanken Wealth Management Company reported that 67% of people had delayed family inheritance planning due to the fear that their cumulative assets could leave their estate during their children’s divorce. The same report concluded that 27% of parents have little or no confidence about their children’s marriages lasting which also contributes to the fear of doing estate planning early on. Finally, the same report also concluded that 13% of parents are holding back financial support because they believe it inhibits their children’s desire to work and earn their own money.
Tips on Safeguarding Family Wealth
At Verhaeghe Law Office we have seen many instances where marriages fail because things were not in writing from the get-go. Here are 3 tips we have prepared on how to safeguard your family wealth in the event of a divorce:
- Cohabitation Agreements: Have a cohabitation agreement in place from the moment you have moved in with your significant other. This agreement will provide guidelines on how things get divided in the event your relationship ends – leaving a lot of guesswork out of the process later on down the road.
- Setting Up Family Trusts: Have Trust(s) set up by a wills and estates lawyer. An estate lawyer can set up a Trust(s) that works for you and your estate. Family trusts especially allows wealth to be passed out of the parent’s estate for inheritance tax purposes and clauses can be put in as to what happens in the event of your children divorcing.
- Prenuptial Agreements: Have prenuptial agreements in place prior to becoming legally married or lawful partners. Again, these types of agreements can prevent your assets from getting taken from you and your child if it’s clearly laid out from the beginning in writing. Always encourage your children to get one done before getting married – as it will save both parties a lot of money down the road.
Finally, we always recommend you consult with a lawyer for legal advice on how to better safeguard your family wealth prior to your children getting married. We also recommend that you guide your children to hire a lawyer as well to ensure that any necessary legal documents and paperwork are set in place prior to them getting married or living together as this will prevent a lot of excess legal fees down the road. It is better to plan first than to be sorry later.
Verhaeghe Law Office’s Edmonton Estate Planning Lawyers & Family Lawyers Are Here For You
Our Edmonton estate planning lawyers and Edmonton divorce lawyers can assist you with safeguarding your family wealth during divorce proceedings. Taking a little extra time to safeguard your wealth can save you a great deal of money down the road. Contact our law firm today for a consultation with an estate planning lawyer or family lawyer.
Disclaimer: This blog is intended to act as a general overview on a legal topic and does not constitute legal advice. If you require divorce law advice in Alberta – then please consult with a divorce lawyer or family lawyer for specific advice as it pertains to your specific situation.