Most people remain financially worse off after divorce than they were during their marriage. Fortunately, there are measures you can take to minimize the effect of the divorce on your finances. Here are some of those measures:
Close Joints Accounts and Lines of Credits
One of the first things to do is to close joint bank accounts and lines of credit, such as your credit cards. Here are some of the reasons for doing this:
- It prevents your partner from misappropriating your money
- It prevents your partner from damaging your credit score
- It prevents your partner from taking more debts in both of your names –debt that you have to shoulder during divorce
Once you have closed the accounts, open new ones in your own name so that you control your money and start building a new credit history.
Document All Your Assets
If you don't have the information already, you should know all the assets you own and their worth. You should know how many cars you have, how many businesses you have, how many paintings you own, and where all of them are located. This will make it difficult for your partner to hide assets during the divorce.
Gather All Financial Documents
Knowing that your family expenditures run to $40k per year is one thing, being able to prove it is another. Yet, the information is crucial during alimony and child support deliberations. This is just one example of documentary evidence can help with the divorce. Therefore, gather all financial documents such as bank accounts, receipts for family expenditures, utility bill payments, and tax records, among others. Make copies of the documents and keep them in a safe place.
Update Your Beneficiaries
You should also update your beneficiaries in all your estate planning documents. If you are like most people, then you will probably want to remove your spouse from your list of beneficiaries or replace their names in your list of executioners. The law will not assume that you don't want them in those roles just because you are divorced; you have to make the changes on your own.
Make a Budget
Many people experience financial difficulties when going through a divorce. This is because expenditures increase when going through a divorce, especially if you are separated and managing two households with the same income. Therefore, prepare a modest budget and stick to it for the duration of the divorce.
This is also one of the reasons you need a divorce lawyer; the lawyer will advise you on how legal ways to protect your finances during the divorce. Contact a company like Reagan, Melton, & Delaney LLP for more information and assistance.