While it may seem stressful at the time, doing it will keep you financially stable during the divorce proceedings.
Have a prenuptial agreement.
The best way to protection your finances during a divorce is to have a prenuptial agreement signed before you get married. For many people, this is a very hard and awkward conversation to have, but if each person is coming from a different financial background, it’s often a necessity. However, if you didn’t have a prenuptial agreement signed, you’re not completely out of luck in the finance protection department.
Cancel joint checking accounts.
If you have a joint checking account, the first thing you should do is cancel the joint account and open up separate checking accounts. Be sure to have your paychecks and any other additional income sources rerouted to the new bank account. If you have money in a joint savings account, the courts will usually put this money on hold until your assets have been determined and split appropriately, or that money will be placed in escrow and used to continue paying joint bills (such as home utility bills or debts).
Cancel joint credit cards.
If you have joint credit cards, it’s also important to cancel these and have individual accounts opened for each of you. This way, your ex cannot spend money on your card and expect you to pay the bill. Keep in mind that if there is a hefty balance to a credit card, it may be impossible for you to close the account until the divorce is finalized. If this is the case, ask the credit card company to put a freeze on the account until the divorce has gone through.
Change names on important documents.
After your divorce has been finalized and your assets have been legally divided by the courts, you need to ensure you change names on any important documents. For instance, be sure to change the name on house deeds or car titles. You’ll also want to go through and make adjustments to the beneficiaries listed on your retirement plans, life insurance policies, wills, and other investment accounts you may have. The last thing you need is for your ex to benefit off of anything happening to you because you forgot to make the necessary adjustment to these documents.
Make smart financial decisions.
Your divorce will be a lifestyle change, and it’s important for you to make smart financial decisions during and after your divorce. For instance, if you and your ex are trying to sell your home, it may be a better idea for you to stay with family until the divorce has been finalized. Otherwise you could end up spending money on the current home you’re trying to sell as well as a new place, and that’s hard to do on one income. In addition, you may want to consider downsizing since you’ll only have one income going forward. Be sure to take a hard look at your own individual finances and create a budget that works best for you.
Check your credit report.
During and after the divorce, be sure to check your credit report often to ensure your ex didn’t incur any debt in your name. While you would hope this wouldn’t happen, it occurs more often than not in some situations. However, keeping an eye on your report allows you to stop an error before it spreads into something much more expensive. Using tools like Credit Sesame to alert you to credit changes can help make this task easier on you.
Getting divorced is expensive, but if you know how to plan ahead, you can keep yourself protected from a bad financial situation.