Divorce & Finances: How to Protect Yourself Financially?

Divorce can be painful. However, it can be a reasonable process where both of the spouses want a harmonious parting, or it will be a hell-on-earth if they stick together for another moment.

There are even times that even the amicable ex-spouse can turn downright nasty and spiteful when the other ex-spouse begins dating, for instance. Since you have no idea of what will happen, it is important to protect your assets and money from the possible consequences of divorce.

Divorce & Finances: How to Protect Yourself Financially?

Before You Divorce

Protect Your Data & Mail

Be sure to secure the copies of your financial documents including your tax returns. After, alter all of your passwords. Also, since you will be creating your own financial life after the divorce, you will have to obtain your own mail and keep your privacy. An ideal way to do is to open a Post Office (P.O.) Box and have all your mails delivered through your P.O. Box instead of having it straight in your apartment or house.

Open a Bank Account

If you already have your own bank account prior to the marriage, preserve that separate account from your joint bank accounts. If you have not combined it with the money of your spouse, you will remain its legal owner if ever a divorce hits your marriage.

However, if what you only have is a joint account, you should open your own bank account and start depositing money in it. Your spouse cannot drain your own account the same manner as she or he can do to your joint account. But be aware that if you are living in a community property regime of marriage, whatever deposited in your new bank account will be considered as conjugal property.

Maintain Good Behavior

It is important to behave well. Do not engage in dating or fooling around with others. As much as possible avoid partying the night out. Also, do not speak harshly with your spouse or creating major issues. All these acts might return haunting you during the divorce proceedings.

Establish Separation
In a community property regime of marriage, this step is very useful in protecting your sanity, income and preparing yourself to live on your own. The moment the date of the separation is finalized, your spouse will no longer be able to claim one-half of your income as his/hers, or any new properties you obtain using that income.

One means to establish separation is to relocate. Get your own house or apartment, or you can live with your parents again. This will make it clear that you will no longer function as a couple. Most importantly, the income that you receive after the separation should no longer be claimable by your soon ex-spouse.

During the Divorce

How to File

If you have the money, get the services of a good lawyer. Though it may be costly, the stakes are higher. With that, having a lawyer is not a choice for most people. Arbitration and mediation are less costly and less time wasting choices that happen out of court. These processes are ideal for couples on reasonable good terms and in arrangement on how to divide assets and to avoid child custody cases.

Limit the Access to Joint Accounts

It is important to review all of your bank accounts and note which ones are joint accounts. In many cases, you will not be able to close these joint accounts until a divorce settlement has been reached. However, you can communicate with the bank where you maintained your joint accounts and tell them of your situation. This way, you can limit access to those accounts and hence prevent your spouse from emptying them.

Change Account Passwords

Change the passwords in all of your accounts immediately. In choosing for your new password, be sure that is not connected with your life as a couple. Never opt as passwords your family names, pet names, birthdates, or any other information that your ex-spouse are knowledgeable of.

Post-Divorce Finances

Know Your Financial Position
The first thing you have to do after the divorce is to analyze how you are financially. Add all your debts and look at your expenses. Consider your income and honestly assess your financial stand. If you are not sure about expenditures, track them and review your credit card and bank statements.

Make a Plan

If you have debts with high interest, know how to pay for them immediately. Make a realistic and workable budget that covers positive cash flow such as expenses and income. It is also ideal to know how much you should set aside for emergencies and retirement.

Protect Your Assets

Be sure that your properties are well-protected. You have to have car insurance, homeowners insurance and health insurance. If you are not working or cannot afford these insurances, be sure that you are a beneficiary of your ex-spouse’s plan as part of the settlement.

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