No one would argue that divorce is difficult for everyone involved. It’s a very emotional time, there is an inordinate amount of stress, and that’s true even if the end of the relationship is reasonably amicable. However, marriages usually do not end on a friendly note. And even if things begin well, the situation often turns into War of the Roses when arrangements need to be made regarding alimony, assets, child support and custody, and visitation arrangements.
It must be remembered that a divorce isn’t just the end of a marriage. It’s also the end of a financial relationship. And opinions will most likely differ as to how everything should be sorted out. Therefore, it is wise to take steps to protect yourself financially during a divorce. What can you do to safeguard your financial assets?
Get your records in order
Gather and organize all of your financial records; having records for the previous five years is considered the standard. You should have tax records, payroll and income documentation, bank statements, and paperwork related to property, vehicles, and investments. Be sure to make copies of everything and keep them in a location other than your house, such as a safe deposit box or the home of a friend.
Get your own accounts
As soon as it seems that divorce is unavoidable, open your own bank accounts and get your own credit cards. Open the accounts at a bank other than the one(s) you and your spouse used. This will keep your financial activity separate and confidential. A credit card in your name will allow you to start building your own credit record.
Keep a close eye on your credit
In a less-than-amicable divorce, it’s not unheard of that one spouse tries to damage the other’s credit. So it’s important to periodically check your credit report during the proceedings. Make sure no credit cards have been taken out in your name, and watch for questionable activity. Joint credit cards should be cancelled. Monitor outstanding debts. If anything looks suspicious, tell your attorney immediately.
Take an inventory
It is essential to take an inventory of all of your assets. And remember, things acquired during the marriage are considered joint property. Take digital, time-stamped photos of valuable assets; you’ll have proof if something goes missing. In fact, some even make a video recording of items in the home.
There is no question that divorce is expensive. A budget is necessary so you’ll know how much you need, not just for costs associated with the divorce, but for normal living expenses once you’re on your own. Be reasonable. Since you’ll be living on one income, you’ll most likely have to find ways to cut expenses.
Divorce is a painful, unpleasant, emotional experience. But keeping a level head is important. If it’s apparent that divorce is inevitable, you need to protect your financial assets.