Divorce is often an emotional time for families, especially if the divorce was not something anyone wanted. When it comes to managing your finances during this time, there are a few basic things you can do to help yourself during this difficult time even when dealing with divorce-related money matters.
1. Work with a Lawyer ASAP
An excellent divorce lawyer doesn’t just help you with custody. They can also assist you with finances, particularly in the division of assets.
Divorce can have a profound impact on marital properties. For example, a home bought before the marriage may have been owned by one spouse. In a divorce, you will need to know how it should be divided, and you might want a legal expert’s opinion.
This is not only true for real estate but also for bank accounts, savings bonds, or other assets. A lawyer can advise you on what your spouse should be entitled to and what your rights are.
2. Keep Good Records During Marriage
The first step is to keep good records during the marriage. This means keeping track of all expenditures, so you can account for how much goes out of the account each month. You also want to think about any investments or bank accounts that may belong only to one person. Keeping good records during the marriage will make the division of assets easier when your divorce is final.
3. Keep Track of Spending after Separation
After separation, it’s very important to keep track of all expenditures made on behalf of spouses, including joint credit card statements. The reason you want to do this is that in some jurisdictions, only the spouse who is legally separated can request a divorce.
4. Talk to Your Spouse About Divorce before Applying Together
If at all possible, try and contact your spouse or partner about going through the divorce together. This way, hopefully, you’ll avoid contested issues of ownership.
5. Come to an Agreement about One of You Paying the Other’s Expenses
If you cannot get on the same page, you want to think about whether one spouse should be responsible for making sure the other is still getting what they need. For example, if your partner normally covers your groceries and bills, think about whether you want them to continue until the divorce is final.
6. Don’t Assume Your Spouse Will Divide Joint Accounts Equally
When it comes to joint accounts, don’t assume that because one of you was spending more than the account balance will be split evenly. You want to keep track of your balances to make sure you don’t come up short when the time comes.
7. Think Carefully About What You Will Do with Retirement Accounts
When it comes to retirement accounts, think carefully before you do anything with them because once a 401(k) is withdrawn from an account, it’s generally non-transferable and cannot be returned.
8. Think Carefully About What You Will Do with Joint Property
You want to think carefully about what you will do with any joint property that was purchased during the marriage or that has increased in value since then. If the other spouse is no longer living there, it’s not wise to sell your share as long as the property will continue to increase in value. If your spouse wants to sell, then you can attempt to buy them out and sell them yourself.
9. Make Sure You’re Keeping Separate Accounts and Only Using Them for Separate Purposes
Keep separate accounts from now on because this will help with the division of assets. It will also make sure that the spouse who has been left is not responsible for any debts or missing assets from the marriage.
10. Be Careful with Business Expenses and Joint Accounts
Before making business expenses, think about whether it makes more sense to make a personal purchase instead of using a joint credit card or account because this can cause problems with the division of assets.
11. Don’t Sell Anything without Consulting Your Lawyer
If you’re selling a car or something that’s been purchased jointly, be careful to consult a lawyer first. Otherwise, you may end up with less money than expected.
12. Get Help from a Financial Professional
It can be very difficult to manage your household finances on your own during divorce, so you want to think about whether it makes sense to get help from a financial professional.
If you think you may need professional help in dividing your household finances during divorce, make sure to talk to a lawyer first. If possible, agree with your spouse about who will pay for what expenses before going to court. Good recordkeeping of both spending and account balances is key when it comes to the division of assets.