If you go through a divorce, you’ll quickly learn that it’s not only an emotional ordeal, it’s a financial one as well.
From separation of property to adjusting to your economic plight as a single person, divorce will put your financial savviness to the test.
So to help you make your financial separation as smooth as possible, here are six tips that family law attorneys commonly recommend.
1. Organize Your Records
It’s essential that you prepare a list of all the assets and liabilities that you and your spouse hold both individually and jointly. This should include all of the following:
- motor vehicles
- real estate
- personal property
- savings accounts
- checking accounts
- stocks and bonds
- life insurance
- home equity loans
- credit lines
Make sure you have the name, account number and address for each account.
Furthermore, you should make copies of as many account statements as you can; this will allow you to prove what was in each account. You should also make copies of other important personal documents, such as birth certificates, social security cards, paychecks, trusts and wills.
Finally, examine your recent statements from your jointly-held accounts to determine if any of the spending activity that looks suspicious.
2. Monitor And Build Up Your Credit
Now is a good time to run a credit report to see where you stand. If your spouse is bitter, you may also consider putting a fraud alert on your credit report.
If you don’t have a credit card in your name only, apply for one and use it to build up your credit. You’ll need to do this so that you can borrow money in the future, and the credit card will also provide some protection if emergencies arise.
3. Stay On Top Of Your Bills
The stress and hassle of a divorce can make things slip your mind. But make sure you’re staying on top of your monthly financial obligations. For jointly-held accounts, if the bill isn’t paid, both you and your spouse will be held accountable, and both of your credit scores may be affected.
4. Change Your Beneficiaries
If you’ve listed your spouse as your beneficiary for your insurance policies or retirement accounts, now is the time to change that. Also, don’t forget about your will, medical proxy or other legal documents.
5. Freeze Jointly-Held Accounts
If your spouse accumulates debt on your jointly held accounts, you may be held liable for it as well. To prevent that nightmare, cancel or freeze all of your jointly-held credit accounts, including credit cards and home equity lines. But before doing this, make sure to tell your spouse.
6. Make Sure You Have Adequate Insurance
In many marriages, one spouse manages the insurance for the household, and the other spouse may not be knowledgeable about his or her insurance coverage. Furthermore, a divorce can change your insurance needs. Take some time to review your policies and make sure that you have enough coverage for you and your children.
Divorce can become a financial nightmare, and these six tips from family law attorneys can help save you significant hassle down the line.