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Financial steps to take before divorce

On Behalf of | Jul 23, 2020 | Contested And Uncontested Divorce |

Finances can easily become a matter of contention in a divorce. When people realize a divorce is in their future, they should go over their finances to make preparations.

People should know the fine details of their finances before the divorce takes place. According to Nerd Wallet, people should look over all their financial documents so they understand their financial marital assets. These include tax returns, credit card statements and bank statements. Additionally, people should look at their loans and the statements from the retirement account. Looking at this documentation can help people realize which assets they will need to divide with their spouses.

Create separate accounts

Many couples may only have joint checking and savings accounts. Policy Genius says that people should set up their own accounts so they can begin to manage their own finances. Spouses may also agree to freeze their joint credit cards and only use the joint checking account to pay their bills. If people do not have credit cards in their names, they may want to open a new line of credit. Additionally, people should start their own retirement account.

Determine the separation date

Spouses may disentangle every aspect of their finances, but these steps may work against them if they do not have a date of separation. The date of separation can be either the date that one spouse files for divorce or the date people stop residing together. If people deposit their paychecks into their new account before they have a date of separation, a court may see these paychecks as marital assets. To prevent this, spouses should make sure they have evidence of their date of separation. This can help make sure that their steps toward financial independence are legally valid.