Divorce can be emotionally taxing and financially complex. Taking proactive steps to protect your assets is crucial to securing your financial future.
Here are essential strategies to consider if you want to protect your money when filing for or going through a divorce.
Understand Your Financial Picture
Before initiating a divorce, gather and organize financial records, including bank statements, tax returns, property deeds and retirement accounts. Knowing the full scope of your financial situation ensures you can fairly divide assets.
Open Separate Accounts
If you and your spouse share joint accounts, open individual bank accounts to safeguard your income and future earnings. Transfer your direct deposits to your new account to control your funds.
Freeze Joint Credit
Request a freeze on joint credit cards and lines of credit to prevent your spouse from accumulating debt in your name. This step helps protect your credit score during the divorce process.
Hire a Financial Planner
A certified financial planner can assist you in understanding the long-term impact of asset division and ensure you make sound decisions. They can also help with budgeting and planning for life after divorce.
Track Marital and Non-Marital Assets
Marital assets are typically divided in a divorce, while non-marital assets – like inheritances or pre-marriage savings – may be exempt. Keep detailed records to support your claims over non-marital property.
Consider Mediation
Opting for mediation over litigation can reduce legal fees and foster a more amicable resolution. This approach can also give you more control over the outcome, including financial settlements.
Update Legal Documents
After the divorce is finalized, update your will, beneficiaries and power of attorney documents to reflect your new circumstances. This step ensures your financial intentions are protected moving forward.
Planning carefully can protect your finances during and after divorce, providing stability during a challenging time.