Going through a divorce is never an incredibly happy time, but there are ways to make it as stress-free as possible – and protect yourself and your interests while you’re at it. Even if your divorce is a relatively amicable one, you still want to get the best deal you can, and hopefully protect yourself and your assets now and in future. Here are some tips on protecting yourself financially while going through a divorce
- Open an individual checking account. Do this as soon as possible. Not only will it help your credit rating, but will also help you sort out who has what.
- Establish as much credit as possible. Credit is vital when it comes to borrowing money, and credit scores can affect future properties you may rent and even the type of job you get. Make sure you don’t suffer any fall-out from your spouse’s lousy credit rating, and do as much as possible to establish a solid credit rating of your own. If you’ve never had a credit card of your own before, get on the horse as soon as possible.
- Track down credit cards. Make sure your spouse isn’t charging things to your name, or on a joint credit card, which could affect your rating. Track down and cancel any joint accounts. This can be difficult if they are not being sent to your home address. You can freeze accounts by telling the credit card companies that you are going through a divorce.
- Take care of the mortgage and other loans. If you will continue living in the house it’s important that only your name is on the mortgage, and vice versa. The divorce proceedings will sort out who is paying for what. Transfer the car to one name as well through the Department of Motor Vehicles, and sort out who is paying for what loans.
- Keep track of all investments etc. Go through all you and your spouse own with a fine-toothed comb, and make copies of every single financial document you unearth. This can include mortgage and life insurance documents, 401(k) statements, tax returns, bank statements, money market accounts etc. Also, make sure your name is on every legal document, especially the title or deed of property the two of you bought together.
- See if you qualify for alimony, support and/or maintenance. Support isn’t based solely on gender – both men and women can get it. Similarly, you don’t need to have kids to receive it. Don’t make assumptions, get the facts. Speak to a divorce lawyer as soon as you can.
- Save money. You never know when you will need it, so now is not the time to be a spendthrift. Squirrel away what you can in your individual bank account – it might soon come in handy!
- Consider mediation as opposed to litigation. A lot less time-consuming – and costly. If it works, this is usually the best – and more financially viable way – to come to an agreement for everyone concerned.
- Don’t forget to change your will. Many couples forget to do this after the divorce. Don’t.
- Hire a financial planner with a specialty in divorce. They can advise you what to do next as far as asset division is concerned based on your current situation.
How to Start a Divorce
Many clients contact us when they are thinking about filing for divorce, so I thought that it would be helpful to have a brief review of what someone can do to prepare to file for divorce. Here’s what can be done:
1. Start by determining what you what to end up with. What are your goals, needs and interests? Everyone is different, and has different priorities. There may be certain assets that are more important to you than to your spouse. Maybe you need cash now to pay for some immediate expenses, or maybe you need extra retirement assets. Whatever the situation, you will feel better and be better off after the divorce if you decide early what your objectives are.
2. Select a method. Do you want to use collaborative law, litigation, mediation or just try to work out things with your spouse via email and conversations? Investigate the options and choose the way that works best for you. In researching the possibilities, make sure that you speak with an attorney with significant experience in the different methods.
3. Prepare. Gather records and information about your finances and be familiar with any issues regarding your child and your spouse. For a handy checklist, see prior posts on how to prepare for an initial meeting with an attorney. Even if you decide to proceed on your own, these checklists and ideas will be helpful.
4. Meet with your attorney. It is important to see the attorney before things get heated up. Your attorney will appreciate having time to prepare and you will have more options on how to proceed. You will have time to gather or request records and you can plan different options for where you will live and how bills will be paid.
5. Take the first step. File, set a hearing (if needed) and serve the papers. It is generally advantageous to be the one to file first. Once it is inevitable that the divorce will take place, you will be better served by being active and getting things done at your convenience.