Among the other impacts of divorce, many people also experience a blow to their finances. From asset division to alimony payments, there are a number of financial obligations that may arise, which will leave you in a tight spot financially.
According to U.S. News & World Report, there are a number of ways you can protect your finances during a divorce. Taking these steps ensures you will enter into your new life fully prepared.
Be forthcoming about your income and assets
Intentionally concealing your assets or attempting to hide them from your soon-to-be former spouse can land you in hot water legally. The opposing legal team will undertake a thorough accounting of your financial situation, which means it is likely they will discover your assets. Instead, present an accurate and honest view of what you have. This will spare you from legal reprisal and make for a more efficient process.
Divide your bank accounts
If you and your ex share a bank account, it is best to separate funds and close the joint account. However, exercise caution when doing so to ensure you are not penalized, or that your spouse does not withdraw all the joint funds for their own use. If you have a concern that this might happen, withdraw your share of the money and inform your spouse immediately.
Develop a rainy-day fund
Once you have separated accounts, the next step is to open a new savings account in your own name for emergency funds. These funds help you pay for the vehicle or home repairs, cover legal costs, or deal with an unexpected expense. Emergency funds are important even after divorce finalization, as they prevent you from dipping into savings or relying on credit.
Get started on your financial divorce strategy as soon as possible. Gather documents, secure accounts, and confer with professionals to ensure you have the proper information.