Preparing your finances before divorce
Dec 12 2016 - Posted by On Behalf of the Lincoln Law Firm, PPLC, in Divorce, Divorce Mediation, Tagged in Divorce, Financial Challenges
Many people anticipating a divorce go through a combination of relational and financial complications. Fortunately, by taking calculated steps to organizing finances, monetary concerns can be alleviated. Divorces can be expensive, especially with assets and children involved. Learn how to begin getting your finances figured out before the divorce proceeds.
Organize your records
Keeping detailed financial records will help you prioritize your expenses and prepare for the divorce. Writing down your expenses is a good start. Collecting your credit card statements, tax returns and year-end statements also helps.
Open a separate bank account
You and your spouse have likely created a joint bank account. Setting up your own bank account lets you set aside some funds for basic expenses when things go sour. Save some extra money for things like food, car payments and tuition bills. It also gives you peace of mind if you suspect your spouse may drain your joint account.
Separate loans and credit cards
Remember that debt is divided between divorcing spouses no matter who built it up. Also, bear in mind that debt is marital property. That’s why one of the smartest things you can do to financially protect yourself is close lingering credit cards and loans. Don’t let yourself become responsible for debts you had no role in creating.
Check names on bills
While you will likely need electricity and running water for the time being, it might not be plausible to completely cancel your mortgage or utilities. You can still take proactive steps to ensure you are protected if your spouse doesn’t pay the bills. Putting these responsibilities under a particular name will ensure you and your credit score are protected.
Separate insurance policies
Another important action to prepare for a divorce is modifying your insurance policies. They should be changed to reflect the divorce. If your spouse is involved with any of your insurance plans, you don’t want things to get complicated. Getting your own renters insurance or auto policy is smart planning. You will also likely want to change wills and/or IRA accounts if your spouse is a beneficiary. Most divorced people do not want assets going to an ex.
There is no denying the fact that divorce can be stressful and complicated. The good news is, difficulties can be relieved through careful planning. Getting your financial situation sorted is a crucial step to making the process smoother. If you need assistance with preparing your finances, you may want to consult an experienced family law attorney.