Going through a divorce will have a devastating effect on your finances. There is no way around it. What was once one household will now become two. The same amount of income you relied on to support your family will now have to be divided between two households. Even so, there are some things that you can do to make lessen impact of your divorce. Please see the checklist below:
- Get a written agreement before you marry. The first line of defense against being ruined financially in a divorce is to enter into a prenuptial agreement. This will help determine who gets what in the event you ever get a divorce.
- Get a written agreement after you marry. If you are married and not separated, you and your spouse can enter into a postnuptial agreement. Like a prenuptial agreement, this agreement will help determine how property is divided if you ever get a divorce. However, this agreement is made after you are already married.
- Get a written agreement after you separate. If you are already separated, you and your spouse can enter into a marital settlement agreement. This will determine how your property is divided in the divorce.
- Inventory your valuables. Keep track of all your valuables by photographing them and keeping them in a safe place. You may also want to have them appraised and insured by your homeowner’s or renter’s insurance.
- Keep your inheritance separate. If you were given money or valuable gifts, make sure that you keep documents of where the items came from. If you inherited money or were gifted money, be sure to keep those bank accounts in your name only. Do not add your spouse to any accounts holding inherited money or gifted money.
- Do not add your spouse to your house title. If you owned a home before you married your spouse. Never add your spouse to the title of your home.
- Take all your personal property from the house when you leave. If you and your spouse are separating and you choose to be the one to move out of the home, take every personal item you wish to keep. Assume that any personal property left in the home will be lost to you forever.
- Take half the money from the bank. If you and your spouse have a savings account, consult with an attorney. If advised by your attorney, take half the savings before you separate and leave the rest for your spouse.
- Freeze all pension and retirement accounts. If you and your spouse have accumulated a pension plan or a retirement plan together, make sure your attorney freezes those accounts.
- Cancel all joint credit cards. If you and your spouse have credit cards together, make sure you cancel them or take your name off the card so your credit is not negatively affected by your spouse’s spending habits.
- Keep all pink slips to vehicles safe. If you and your spouse own vehicles that are paid off, make sure the pink slips to the vehicles are kept in a safe place.
- Make Copies of All Important Documents. You’ll need to have copies of all important documents before you leave your residence. This includes tax returns, paycheck stubs, W-2 statements, profit and loss statements, retirement information, loan information, and business records for any business you and/or your spouse owns.
- Disclose all your assets in the divorce. Make sure you divulge all your assets in the divorce. If you are not honest, you risk losing the asset entirely.
- Get your spouse’s financial records. You have the right to obtain financial information from your spouse. Make sure your attorney helps you gain access to your spouse’s financial records before entering into any divorce agreement.
