How To Protect Your Money During Divorce
Going through a divorce or separation is one of the most difficult times in life. Not only is it emotionally exhausting and time-consuming, but there are a number of financial mistakes which would make the whole process so much worse. With that in mind, here is some advice for protecting your financial position if you and your partner are going your separate ways.
Get to know the laws
It’s really important that you understand as much as possible about how divorce laws affect you and your separation. Don’t forget that divorce laws vary between each state. That’s why making an appointment to talk with a lawyer who specialises in family court is always a good idea. Not only can they offer you legal guidance specifically for your situation, but they may also have some guidance or suggestions regarding your financial assets during the divorce process. By getting to know everything you can about these laws, you’ll know exactly what to expect. And simply by having access to the right information will help ensure your finances are protected as much as legally possible throughout the divorce.
Evaluate your financial situation
One of the first things you should do is ascertain exactly what assets you both have. That means gathering all financial documents, bank statements, insurance papers, and even your marriage certificate. You want paper records of everything so that you know who owes what, and there’s an actual quantifiable number you can see as a total And instead of just guessing the value of everything, actually go out and get written appraisals of all valuable assets before the divorce process begins.
That way you’ll have a list of all your financials, so you know precisely how much money there is to split between you both, and you’ll also know exactly where it all is. Plus you can update the list as required whenever debts get paid down or assets are sold off.
Update your financial accounts
Once you both have a clear understanding of your financial situation, it’s a good idea for you both to speak with your bank. Close your credit cards and freeze your joint accounts. If that’s not possible, you should at least change joint accounts so that both of you need to sign before any funds can be released. You should also do the same with all of your joint loans and remove access to any redraw facilities that may be available to you. Similarly, if you have joint insurance policies, cancel these and look into getting new health and life insurance options set up. If you have children and you’ll become a single mom, make sure you are covered in case of any energies.
Taking care of your financials will protect the money in your accounts from being spent, as well as ensure you won’t be liable for any new debts. Then you can both stay focussed on working through splitting assets during property settlement, without confusing it with new debts or other financial issues.
Disclose all your assets
Instead of voluntarily disclosing all aspects of their financial situation, some people attempt to hide assets from their ex-partner, the lawyers, and the courts. All information regarding your finances and assets such as property, jewelry, and investments will eventually be disclosed, so it will almost always backfire and cost even more in the long run. Because not only is attempting to conceal your assets a waste of time but getting busted will cost you big money in fines. The best thing you can do is be honest about all your finances and assets by providing all supporting documents upfront. This financial transparency will help you build up trust and credibility, which will also help to translate into saving time and money on legal fees.
Keep communication lines open
It’s certainly not uncommon to become difficult, tense, and emotional during the separation process. But despite these challenging times, it’s important for you both to be able to contact each other freely when needed. Especially if there are children involved. So no matter how bad things get, keep communication lines open between you both. Show each other respect throughout the separation process by taking ownership of your mistakes, and always be understanding if they make mistakes. Because ultimately you both have the same end goal of a legally binding and cost-effective property settlement that’s equally fair to the both of you.
While these are all important considerations to protect your finances during divorce, this list is by no means exhaustive. The most effective ways of protecting yourself will ultimately depend on your specific circumstances, so there could be much more you may be able to do. That’s why you should always seek advice from a family lawyer and a financial professional as soon as possible and continually throughout the whole process.