Financial Steps to Take BEFORE You Divorce
No matter which side of the fence you are on in your divorce, it is psychologically challenging and emotionally draining. As such, these are the most important reasons why you should prep your financial situation before you file for your divorce. Please note that we’re not suggesting that you do anything illegal, unethical, or something that will be a detriment to your children. These are just a few simple steps that can help make your life a bit easier during and after the divorce.
- Copy your financial records. Gather and copy all financial documentation that has your name on it, including bank account information, mortgage information, credit card statements, Wills, Trusts, and 401K information. Keep the copy in a secured place, such as a safe deposit box or even at a friend’s house.
- Start setting aside funds for the divorce process. Normally, this is only an issue when one spouse has complete control over all of the finances. Oftentimes when this is the case, the controlling spouse will cut off all finances from the other, trying to force them to sign whatever decree is presented in front of them and trying to prevent them from hiring proper representation. Set up your own account, secure the funds you need, and keep it separate from your spouse.
- Open separate bank accounts, credit cards, etc. Once you know a divorce is imminent, it’s time to set up your own, non-joint bank account and/or credit cards if you don’t have on already. This way, once your joint accounts are divided, you will already have a separate account set up for the deposit. Having your own account will also help you establish proper credit. Our office advises clients to open their separate account at a different financial institution (different company, not branch) until the divorce is complete. Many joint account agreements provide that, should your spouse overdraft the joint account, the bank can look to funds in your separate account to cover the shortfall.
- Obtain a copy of your credit report and monitor it . By watching your credit report, you’ll know if your spouse is trying to ruin your credit with obscene charges, if your spouse is buying gifts for another boyfriend/girlfriend, or if your spouse is distributing joint funds/assets in other ways.
- Open a post office box. Once you have opened new accounts, hired an attorney, etc., you will want to ensure that you actually receive any mail from these institutions as well as keeping them confidential from your spouse. A post office box is easy to set up, convenient, and 100% secure from your spouse.
- Talk with a lawyer about changing your beneficiaries and power of attorney designations. Depending on the timing and jurisdiction of your case, you may want to consider making some changes, however, it is often not proper to do so. You should talk to a lawyer before making any such changes.
Many of these suggestions may seem petty and prone to worsen your divorce, but trust us, they will help ease your already traumatic divorce process and avoid problems prior to starting the divorce process that can be very expensive to deal with during the divorce process. Be aware, though, that many jurisdictions have Standing Orders that go into effect upon the filing of a divorce petition and prevent some of these activities. If a divorce has already been filed, or if you are unsure of its status, you should talk with a good family lawyer in your area before doing anything.