Separating or filing a divorce is a very painful and stressful process. However, if you and your ex-spouse desire a peaceful parting, it can be a relatively easy process. It will be beneficial for both of you if you and your ex-spouse try to agree on urgent, short-term financial issues. If this is not possible or if you are worried that your ex may deal with finances without informing you, you should think about how you can protect your financial position and take legal steps as soon as possible.
There are steps you can take to protect your finances from the potential ravages of divorce. Here are a few basic pointers to help you organize your finances once it is clear that you are going to divorce your spouse. But before all that, it is advisable to seek legal assistance from a divorce attorney to guide you throughout the legal process.
Are You Living In A Community Property State Or Separate Property State?
If you are thinking of filing a divorce, you should prepare ahead of time. This means you should find out whether your paycheck, the car you purchased, and your retirement account belong to you or if it is considered as a joint property. If you are living in a “community property” state, your spouse will be entitled to half of everything you purchased during your marriage, and this includes your paycheck.
However, if you are living in a “separate property” state, the assets you purchased under your name belong only to you, says the divorce attorney at Tad Nelson & Associates. This means that the assets and property you bought into the marriage under your name will not be considered community property. In addition, if you received personal gifts or inheritance during the marriage, those will also be considered as yours. It is very important to be aware of how your state handles property because this will affect the steps you should take to protect yourself financially.
Gather Financial Documents
You should get copies of bank and credit card statements and other important financial documents. You should also ask your divorce attorney what other financial and legal documents you should have a copy of. Secure these copies so that your spouse won’t have access to them. Gathering these documents early on helps you avoid possible problems if you try to get them later.
Open Bank Account In Your Own Name
It is very important to have your own bank account. Doing so will keep your money separate from a joint account. If you are able to keep a part of your hard earned money in your own account, you are the legal owner in the event of a separation or divorce.
If you don’t have your own bank account, it is time to open a new one and start contributing to it. Doing so will prevent your ex-spouse from draining your finances the same way he or she could if you only have a joint account.
Assess Your Credit Report
You should get a copy of your credit report and see if there are any problems with it. Correct any errors and make sure that you maintain a good rating. A good credit rating is your foundation for your financial future; therefore, you should monitor it properly. In addition, you should remember that debts that are normally paid by your spouse will still reflect on your credit score. If your ex-spouse is using your joint credit cards to buy personal items or gifts for his or her new lover, you need to document that.
Despite all the hustle and bustle, you should not forget to update your beneficiaries. This means you should make necessary changes to accounts where you named your ex-spouse as your beneficiary. Some of the accounts your need to update are retirement accounts, insurance policies, your last will, and other legal documents.