If you are going through a divorce right now, the next best step after nursing your broken heart and dreams is to protect your money. Scratch that; protecting your finances should’ve been done way before you got married, while you are still happily married, and right after the marriage broke down. More than 50% of marriages end up in divorce. Don’t wonder why. That being said, it’s safe to say that you are not alone with what you’re feeling. Many people have gone through the same thing, survived, and succeeded. You can do it, too, provided you take the first step of protecting your money.
Hire a Good Lawyer
Every good divorce strategy will begin with hiring a great lawyer. A good lawyer will not only ensure your rights are protected but that you get what you deserve. Experienced lawyers will not want to go before the court. They would try to settle the disputes through negotiations and mediation. This way, you and your ex-spouse will not need to face the viciousness of court hearings. Now, it’s always a different matter if kids are involved. You’ll need a child custody lawyer for that and way more emotional investment.
Open a Personal Account
By now, you should already have an account in your name only. The joint account with your soon-to-be-ex-spouse should be put on hold because that is subject to negotiations. Open an account as soon as you feel that the marriage is on the rocks. It’s one thing to trust your partner to protect your investments and money when you’re together, but it’s another thing not to have your own account in which you will save your personal money.
Take Inventory of Assets and Liabilities
Your attorney will ask for a list of assets and liabilities. If you can work this out with your ex-spouse, then better. If not, your lawyers can guide you through the process. You need to list all your assets—cash and properties, whether bought or inherited. You also need to give the lawyers a list of your debts—credit card dues, insurance policies, past tax returns, and business loans. Both of you need a clear understanding of how much equity you have. If there are inheritance problems either on your or your partner’s side, the lawyers will help you sort them out.
Fix Mortgage, Rent, and Other Existing Payments
Even though you are going through personal problems, utility companies don’t care about that. They’ll encash the checks you issued with nary a thought to what you are going through right now. To protect more of your money and not have the check bounce back, make sure to fix the details of your existing and continuing payments with your ex-spouse. You will soon have to separate these, but until then, these payments have to go through regardless of your situation. Make sure that your ex-spouse will shoulder his/her part.
Change Your Will and Beneficiaries
Ask your lawyer if you can already change the beneficiaries in your insurance policies and will while the divorce proceedings are going on. If yes, immediately delete your ex-spouse’s name on the will. In most states, former spouses cannot serve as trustees or executors upon an ex’s death. However, this still depends on the arrangement you have as a family. If you trust an ex-spouse enough to handle your will after your death, then a special arrangement can be made for that. However, it is rare for spouses to still trust each other with their finances after the marriage ends. Look for someone else to be your trustee.
Manage Your Retirement Accounts
Retirement accounts are also marital property. There are many ways to divide those funds, but the best step is to talk it over as a team. If you keep them together, you might both save on taxes and fees. If that’s not something you can do maturely, separating those accounts will take some time. Meanwhile, make sure that all your other investments can be divided equally between you. Retirement might seem trivial since it’s so far from today but neglecting it during divorce proceedings is one of the worst things you can do.
Protecting your money must be parallel to the divorce proceedings. It cannot be completely separate from the legal proceedings of the divorce because finances are one of the most contentious issues in any kind of legal separation. Make sure that your money is well-protected according to the provisions of the law and any agreements you’ve had with your spouse in the past.