The Best Ways to Protect Your Money During a Divorce
If you are going through a divorce you will know that it can be expensive. You will want to protect your money as best you can. These tips will help you to protect yourself.
1. Open A Personal Bank Account
If you don’t have a bank account in your name only, it’s time to open a checking account and a savings account. Tell your spouse when you do this and keep an account of how much you’re going to be depositing into your personal account.
While you want your spouse to know about this account (that way you can never be accused of hiding your marital money), you don’t want to keep it a secret.
Upon separation, when you file for a divorce, you’ll be able to afford the required cash to cover your attorney’s fees and any court fees that you’ll need. Additionally, you should also have the monies required to pay for a new residence. It’s a wise rule of thumb to avoid filing for divorce until you have the amount of money that you’ll need to pay for your legal counsel and your living expenses for at least 3 months.
2. Close Every Joint Account (Credit)
Make sure to pay down and close out all of your joint credit accounts that are held together. Regardless of whether you have a Target credit card, the mortgage on your home, or other credit cards, they should all be paid off if it’s at all possible, or, put the cards into one name or the other.
If you can’t pay the credit accounts off, make sure to speak with your creditors and ask them for the proper steps to take to remove your name from each of the accounts. In a divorce mediation or court, the debts must be split. The fewer debts the better and the easier the negotiations will be.
If you’re not working or if you don’t have an income, encourage the spouse that is earning money to assist you in removing your name from all of the joint accounts. You can also negotiate ways to split the debt by taking on a portion of the debt once you are receiving a living wage.
Make sure to pay down and close out all of your joint credit accounts that are held together.
Another way to protect your investments or money is to withdraw half of the money in the accounts and place them into your own personal account. Keep in mind that if you withdraw more than half of the money the courts may require you to return the overage. You can also consider changing the signature authority on joint accounts to ensure that you must both sign to complete a transaction. Instead of Mr or Mrs, it would read Mr and Mrs.
3. Always Protect Your Valuables
If you’re in an abusive situation, or if you believe that the other spouse will attempt to hide or destroy valuables, hide them. Remember, however, if you and your spouse purchased these valuables together, they must be valued and split accordingly during the divorce proceedings.
According to Harrogate Family Law you need to list the valuables and not hide the fact that you know where they are. When you list your marital property after filing with the courts, you’ll need to list any and all valuables that you’ve removed from the house. Don’t sell any of the valuables if you need cash. Should you sell anything, you may have to pay the amount back during the negotiations.
4. Don’t Incur New Debts
It’s important to save as much money as you can before filing for your divorce. Avoid incurring more charges on credit cards. This isn’t the way to save money. Once you have removed your name from credit cards, cut them up.
It’s important to only use cash until after the divorce is final. Always keep a level head and save so that you never have to be flat broke again. You don’t want to start your new life with overwhelming credit card debts.
It’s important to save as much money as you can before filing for your divorce.
5. Always Request A Copy Of Your Credit Report As Well As Your Spouses Credit Report
It’s important to know what your credit looks like, as well as what your spouse’s credit looks like. If they have credit accounts that are open and you don’t know about them you might have made a foolish mistake that could negatively impact your credit as well as their credit. Work on cleaning up your credit report before filing if it’s at all possible.
6. Get Your Own Post Office Box
It’s important to keep your new banking information private as well as other important documents and information in regards to your divorce. Make sure that this information can’t be intercepted by your spouse. Protect your privacy and avoid leaving anything lying around that your spouse could use against you. Get a Post Office box and have mail delivered there for the time being.
7. Document Everything Before You File
Before you file, you’ll want copies of all cash sources, valuables, and anything else that may be important according to family law specialist Lenore Tsakanikas. She suggests that you take pictures of your marital assets. If you purchased something expensive on a trip, make sure that you have copies of the invoices as well as photos of the item. Keep receipts and bank account information as well as investment account information. Keep these items in a safe location away from your home.
8. Get Some Job Training Prior To Filing
If you’ve spent the last several years as a stay-at-home parent, you likely need to brush up on some job skills. Try to get back to school before you get your divorce. You can still protect your future earnings. Don’t make a mistake and assume that you can live off of the child support or even alimony while you’re job hunting.
Alimony laws have drastically changed and today you’ll get very little, and then only for a very short period of time.
9. Get Rid Of Any Financial Power Imbalances
If you’ve never been involved in paying the bills, learn how to take care of them. It’s vital to understand how the bill-paying process works and know how much money is coming into and going out of the household. This will help to keep you on equal footing and to negotiate an equitable settlement.
10. Understand The Value Of Pensions And Retirements
Other than a house, retirement funds are typically the largest marital asset. Be familiar with the value of your retirement and your spouse’s retirement funds. Understand how they will be divided for your particular state. This will prevent you from being taken advantage of during the proceedings.
11. Don’t Ask For Alimony
Know that alimony is a form of taxable income. Attempt to come up with an agreement that labels this payment differently so that you won’t have to pay taxes on it. Don’t claim it as income during tax time. Once your divorce is final be sure that you watch for the word alimony and avoid signing anything with this word in it.
It’s normal for a divorce to shake up emotion and cause you to make decisions you wouldn’t otherwise make. keep this in mind and be proactive to avoid making rash decisions. Think everything through carefully so that you won’t have any regrets five years later.