Divorce is perhaps one of the most stressful life endeavors for anyone who’s going through this undesired life event. Because, even if you’re the one initiating the divorce, it can’t be any different but to feel blindsided. At some point, bad thoughts will creep through your mind. As you stand in the courtroom or at home awaiting your soon-to-be ex’s next move, a lot of questions will race through your head.
However, if it’s happening to you, rest assured that you’re not alone. In fact, the American Psychological Association’s latest estimation says that approximately 40% to 50% of all marriages in the U.S. these days will probably end in a divorce.
Nonetheless, if you find yourself in such a situation it’s essential that you take proper care of yourself and your close ones, especially of your kids and your financial belongings. The thing with divorces is that everyone comes out of a divorce financially damaged, but when the dust settles, you don’t want to find out that your ex-spouse got out of the marriage in a great financial position while you’re left in shambles.
With that in mind, consider the following strategies and tips when you and your spouse begin to divide your assets.
1. Open Up A Personal Bank Account
Once you realize that your marriage situation is leaning towards divorce, it might be the perfect moment to open a checking and savings account in your own name if you don’t already have one. However, it’s in your best interest that your soon-to-be-ex-spouse knows about this account, so you won’t be accused of hiding money from a spouse. For that reason, tell your spouse when you’re going to do this, and keep track of how much money you’ll be putting into your personal account.
You’ll be able to afford the requisite cash to cover your attorney’s fees and any court fees once you’ve separated and filed for divorce. Additionally, you should have the funds necessary to purchase a new home. Beware that It’s a good rule of thumb to hold off on filing for divorce until you have enough money to cover your legal fees and living expenses for at least three months.
2. Gather Copies Of All Relevant Documents
Before filing for divorce, you’ll need copies of all valuables, cash sources, assets and anything else that might be relevant. It’s recommended that you document your marital assets. For instance, if you bought something pricey while on vacation, make sure you have copies of the invoices and photos of the item. Keep receipts, bank account information, and investment account information in a safe place. In addition, keep these items out of your house in a secure area.
3. Before Filing, Get Some Job Training
If you’ve been a stay-at-home parent for a while, you’ll probably need to brush up on some employment skills. Before you are divorced, try to return to school. You still have time to safeguard your future earnings. Don’t make the mistake of thinking you can survive off of child support or even alimony while looking for work. And since alimony regulations have drastically changed in the past couple of decades, bear in mind that you will probably receive very little money, and for a very short amount of time.
4. Remove Any Financial Power Imbalances You Might Have
If you’ve never dealt with bills before, now is the time to learn how to do so. It’s critical to understand how the bill-paying process works and to be aware of how much money enters and leaves the family. This will assist you in remaining on an equal footing and negotiating a fair settlement.
5. Close Any Joint Credit Account
Whether you have a credit card or a home mortgage, you should pay them all off if at all possible, or transfer the cards to one name or the other.
If you are unable to pay your credit accounts, contact your creditors and request that they take the necessary procedures to remove your name from each account. Debts must be divided in divorce mediation or in court. The fewer the debts, the better, and the easier it will be to negotiate.
If you don’t work or have an income, ask your spouse who does to help you remove your name from all joint accounts. You can also negotiate a debt split by taking on a portion of the debt once you have a steady income.
Another strategy to safeguard your assets or money is to transfer half of the funds in your accounts to your own personal account. Keep in mind that if you take out more than half of the money, the courts may order you to pay back the difference. You could also want to change the signature authority on joint accounts so that you both have to sign to conduct a transaction.
Divorce is unfortunately never easy, but there are ways to protect your hard-earned money from being eaten by lawyers. When going through a divorce, it is important to keep in mind that the process can be financially draining if you don’t plan ahead. So, if you find yourself going through a divorce, these tips can help you protect your money to ensure that it goes where it needs to go.