Most couples title the bulk of their assets in their joint names. Unfortunately, if assets are held in this manner, a creditor can force the sale of the property in order to collect a judgment and be entitled to half of the proceeds. Instead of joint ownership, if one spouse is at a significantly greater risk of being sued, it may make sense to transfer assets to the other spouse’s name.
The conventional wisdom holds that spousal transfers can be disastrous if the couple is in a shaky marriage that later ends in a divorce, but that may not be the case. If you become divorced, the fact that you transferred your interest in marital property (acquired during the marriage) to your spouse should have little effect on how property is split upon divorce. However, non-marital property (property acquired prior to the marriage and inherited property) should remain segregated from marital assets and be treated with more care.
You might consider an alternative to joint ownership or spousal transfers for holding real estate, a title called “tenants-in-common with cross-contingent remainders” is available. This structure prohibits one spouse from selling the real estate without the written consent of the other spouse. Asset protection specialists say that a creditor of one spouse cannot seize the interest of property titled in this fashion.