Why Protecting Your Private Wealth is Crucial in Today’s World
According to government data, around 42% of marriages in England and Wales don’t last beyond 12 years. It’s worth therefore thinking about the financial consequences of a separation before it actually happens. That might mean thinking about your private assets, and how they might be ringfenced.
Why is Wealth Protection So Important?
There are a number of good reasons to take wealth protection seriously. First, the process of divorce is enormously costly. In the aftermath, you might be forced to start your financial life from square one.
If you know that you’re not going to suffer financially, you can concentrate on the other challenging aspects of the process, including the emotional stress, and the new child arrangements. During a divorce, it’s easy to feel overwhelmed – but if you’ve pre-emptively taken action to protect your assets, you’ll enjoy greater peace of mind.
If you have control over your money, then you’ll also have control over your future. This means that you get to decide whether you’d like to pursue a new career, or invest in your children’s education, or simply retire in comfort.
For most divorcees, the welfare of children will be a primary concern. By protecting your wealth, you’ll empower yourself to have a greater say in what happens to them, and what financial support they might enjoy.
Key Wealth Protection Strategies
So, what might a would-be divorcee do to protect their wealth?
The easiest approach might be to enter into a prenuptial agreement, such that assets can be divided according to a pre-agreed plan. This will help to reduce conflict and disputes, and protect your wealth, too.
You might also put your assets in a trust, so that you can shield them from the divorce, or invest in insurance, which might provide protection against any unforeseen life events that might arrive – including divorce and death.
Finally, it’s a good idea to form a comprehensive financial plan, which takes into account potential sources of risk, and outlines ways in which that risk might be managed.
Conclusion
Taking wealth protection seriously isn’t just about securing more material things for yourself. It’s also about retaining control over your life, and your ability to support those closest to you. Given today’s culture of divorce, the importance of a robust wealth-protection strategy has never been greater.
While it might be the furthest thing from your mind when you enter into a marriage, getting some clarity early on might actually help to build trust, since it removes the possibility that either party to a marriage is seeking to gain financially from a divorce. When your assets are protected, you’ll not only make divorce less damaging – you might also make it less likely.
