4 Ways to Protect Your Finances During A Divorce

Unfortunately, 40 to 50% of marriages in the United States usually end in divorce. And if you are reading this article, then a divorce may impact you. Sorting out your money issues while recovering emotionally can make the process more stressful. But with these few steps, you can make your transition into a new life easier while protecting your pocket.

 

Remember to speak with an accountant regarding tax issues, and discuss legal topics with an attorney.

Determine your total assets

 

The first step to take in the face of a looming divorce is to identify and determine your assets. Assets are any items that you own and include cars, properties, bank accounts, or even clothing. This initiative will help you know what you have as well as its worth.

 

Make sure to separate your assets from that of your spouse’s or what you jointly own. Differentiating your spouse’s assets can be an emotionally charged task, especially if the marriage is ending on a sour note. However, try as much as possible to cast those feelings aside as you determine your own and theirs.

 

Close all joint accounts

 

If you and your spouse have any joint accounts, it would be best that you notify your bank or creditors of your split, especially if it is not cordial. For example, if you have a credit account, all debts incurred during your marriage will have to be split in half.

 

You might not be able to pay off your debt, due to unemployment or irregular income flow. During court negotiations, the judge may allow your spouse to solely take on the debt, provided you manage to find a steady job and start earning wages. Alternatively, if you have any joint savings or investments, the courts may order you and your spouse to split your mutual funds in half.

 

Use an individual bank account

 

Perhaps during your marriage, you and your spouse might have preferred having joint bank accounts. But in the face of divorce, it may be time to open individual bank accounts for both checking and savings. Ensure you are as transparent as possible with your partner, to avoid any accusations of hiding any monies gained during your marriage.

 

When you officially divorce, you will need funds to pay legal fees and find a new home. Ensure that you do have adequate funds that can support you during and after the divorce procedure.

 

Have a solid team behind you

 

When going into a divorce, you need to build up a reliable team to ensure that the entire process works in your best interest. Your team must involve people that you are trustworthy and dependable. Hire the services of a trusted local attorney and financial advisor. Divorce is a challenging and draining procedure, and these people will be able to make non-biased choices on your behalf while protecting you.

 

The process of divorce has many lasting effects on all parties involved. It indicates a shift from a new life and dynamic; therefore, you must protect your finances to help you set up and establish that new phase. Hopefully, these tips will be helpful to you.

 

 

For live CPA exam prep and accounting classes, join Conference Room for free. Members will be notified of course dates, times, costs, and how to attend these courses.

 

Get your questions answered to pass the CPA exam, and to learn accounting concepts.

 

Go to Accounting Accidentally for 400+ blog posts and 450+ You Tube videos on accounting and finance:

 

Good luck!

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(email) ken@stltest.net

(website and blog) https://www.accountingaccidentally.com/