There are many goals and priorities that you will need to have when undergoing a divorce. One of the most important of all will be to protect your money. This is especially important if you have reason to believe that the divorce proceedings could turn into a drawn out fight.
With that in mind, here are the actions you will need to take in order to protect your money during your divorce:
Close All Joint Accounts
If there are any accounts that you share with your spouse, you will need to close them. The most critical accounts are those that concern credit cards or lines of credit. In the event that you are unable to close accounts due to outstanding debt, you will need need to compose a letter to the creditor stating that you will not be responsible for any additional debt on that account.
Open New Accounts In Your Name
Next, you will need to open new savings and checking accounts in your name. You do have a right to your marital funds but you should always talk to your attorney about what you should do first. If you open an account and immediately transfer funds, there can be serious consequences in the future. Generally, you are entitled to transfer some of the money (around half) from your shared accounts into your new accounts. If you do this, make sure you keep a record of everything that you spent the money on. This way, you can show the court that you only paid for necessities with the money that you moved out of the account.
Protect Any Mutual Assets
Sometimes, when a divorce is not amicable, your spouse may try to do things to get back at you. They may try to use up your portion of the joint assets so you won’t get them in your divorce. If you are concerned about this, you should consult with a family law attorney. They will help you find out what specific actions you can take to safeguard those assets. One thing they may recommend is to avoid keeping a large balance in your asset accounts.
Protect Any Valuable Possessions of Yours
If you have any valuable possessions that belong solely to you, you should take action to physically hide and protect them yourself. This is mainly important if you believe that your spouse may attempt to hide, damage, or destroy them. Just keep in mind that any valuables that were purchased with marital funds will be valued and split accordingly during the divorce process. Make sure that you keep a list of all possessions and items that you physically remove from the house. This is important so that the court will know that you are not trying to hide the fact that you have these valuables in your possession.
Keep Track Of Income and Expenses
This is a crucial step to help you determine exactly where you stand with your income and expenses. If you did not play a role in paying bills or keeping track of your finances, this will be extremely important. Gather copies of your financial statements and documents. Things such as tax forms, bank statements, investment account statements, any statements on lines of credit, and so on. Your attorney can help you determine which specific statements and documents you are going to need. We have also created a FREE Divorce Financial Documents Checklist to help you in your beginning stages of document gathering.
Do Not Add New Debt
A divorce is one of the very worst times to incur new debt, so don’t do it. Your goal should instead be to save as much money and live as frugally as you can. Running up new charges on your credit card is not an example of saving money. To be safe and avoid this altogether, you should try to use cash until the divorce is over. Focus on setting yourself up financially for the future and saving your money as much as possible. You want to protect the money you have because your financial situation will change drastically. The last thing you want to do is be overwhelmed with credit card debt in your newly single life.