Divorce can be overwhelming, and certainly the financial complexity of most divorces can add to the feeling of “too many decisions and too little time.” If you think there might be a divorce in your future, it’s important to start thinking about protecting yourself financially. These are some things you can do right now to make your financial future more secure.
If you don’t have a financial identity separate from your spouse, now is a good time to begin establishing one. You’ll need money for the divorce, and you’ll need access to funds after you and your spouse separate. It’s a good idea to open your own bank account and establish your own credit card accounts as soon as possible. You may want to get a post office box for your new accounts. And plan ahead. Maintaining two households instead of one can be a real financial drain.
Figure out what you own jointly. It’s common for a divorce to state that one spouse must pay off a debt; for instance, the car loan. It’s also not uncommon for the spouse to stop making payments. If your name is still on the car, you could be held responsible. You need to know what you and your spouse own jointly and how to get your name—or your spouse’s—taken off.
Make a list of your assets. In some cases, one spouse will attempt to hide assets in order to receive a better settlement. If there’s any possibility that there are assets you don’t know about, ask your lawyer for his or her advice about tracking them down. And document everything you can. Make copies of all important financial records and put them someplace safe. This should include tax returns, property tax receipts, brokerage statements, pay stubs, insurance policies, bank statements, and credit card statements.
Think about taxes. Are you better off receiving monthly alimony or a lump sum from your spouse? If taxes are likely to be complex, hiring an expert will be a worthwhile investment. What if you’ve never done the taxes and it looks as if there may be irregularities? Ask a tax expert about protecting yourself with an indemnification clause.
Divorce can be a challenging and stressful process – but we can help. If you’d like to discuss your current situation, or if you have specific questions about the financial ramifications of divorce, we are happy to offer a complimentary consultation. Get in touch with us today to learn more!