A divorce can be devastating, for both you and your family. As well as the emotional impact, getting divorced can also be expensive and cause some real problems for your finances. Here’s how to protect yourself financially from a divorce.
Image – free for commercial use
Get A Prenup
A prenuptial agreement can offer both you and your spouse some financial protection if you get divorced. If you don’t have one, the best way to protect your finances is to understand them. It’s always important to act as partners in a marriage, especially when it comes to money. Both of you should educate yourselves about your finances, and be aware of their debts, investments, family income, and any other assets. A Family Solicitor should be able to help you do this.
Close Joint Accounts
If you’re considering a divorce, then you might want to close any joint bank accounts and open individual accounts instead, but speak to your lawyer before you take any assets from a joint account. Cancel any credit cards that you hold together, and open new ones yourself to prevent your soon-to-be-ex-spouse from generating any new debt under your name.
Closing accounts and opening new ones can dent your credit score for a short time. New credit inquiries can knock a few points off your score. It can be worth taking a hit to your score to avoid accumulating new joint debt that you will be held responsible for.
Keep track of your income and expenses. This is always a wise thing to do but is especially sensible during the stress of a divorce. Track and document all your financial details including child support, alimony payments, shared medical and other expenses. There are lots of apps that you can use to keep track and avoid money worries. Stay on top of your new solo income by creating a budget. You can control your spending easily by doing this.
After your divorce has been made final, and your assets have been legally divided up, change the names on house deeds, stocks and bonds, and car titles to reflect this. Make sure you remember to change the beneficiaries on your investments, retirement plans, life insurance policies, and savings accounts. Update your will as well to reflect your new circumstances.
Don’t Take Advice From Everyone
You shouldn’t take unsolicited advice, no matter how well-intentioned it is. Your friends, family members, and co-workers are bound to offer you advice and tell you about disastrous and amicable divorces of their own. Only take advice from those you really trust and remember that advice is only that. The decisions that you make are up to you. Only take legal and financial advice from a lawyer or financial professional that you trust. They can help objectively and offer the most effective and beneficial advice and strategies.
Try not to tell everyone about your business. Getting divorced is emotional which can make this tough, but as there is so much personal information involved in the divorce process, it’s better to keep the details of what’s happening private and confidential.