Financial Steps to Take During Divorce
You’re no longer living in bliss, and it’s become clear that the time has come to make a drastic change. If you’re considering a divorce, there is more involved than just packing a bag and moving somewhere else.
Most couples have integrated their assets and finances to a point that separating them is both complicated and painful. If you’re thinking about getting a divorce, here are some key financial steps that you’ll want to take to take to protect your financial future.
Get organized
As soon as you think you may be getting a divorce, start collecting copies of important financial documents. If you don’t do this now, they may become difficult to find or access at a later date. You’ll want copies of bank statements, tax returns, credit card statements, and retirement account statements to start.
Establish your own accounts
According to the Consumer Financial Protection Bureau, when you have a joint account, each person on the account is responsible for the full balance. Therefore, divorcing couples should separate bank and credit card accounts as soon as possible to eliminate the possibility of one party transferring all funds into an individual account or running up a credit balance. Even if a spouse is listed as an authorized user on a bank account, remove them unless you are using that account for agreed joint expenses.
Create a budget
In most cases, it costs more to live alone than it does to live as a couple. Regardless, your monthly income and expenses are going to change, and some adjustments must be made. Create a detailed budget for your new life so you know what your situation will be going forward.
Avoid major financial decisions
While your life will likely be nothing but changes for the foreseeable future, try not making any financial decisions that could have long-term ramifications. When divorcing, it’s best to wait at least six months before buying a new home, moving across the country, or selling a business.
Line up your experts
No matter how you think you feel about your divorce, emotions can often rule important decisions. This is why many experts recommend that you have a team of advisors lined up that can help with these important choices. Consult a financial advisor about your accounts and estate planning. Meet with an accountant to ensure that you are paying the proper amount of taxes. Finally, be sure that you have a lawyer who will protect your rights and your assets as you move forward.
