Preparing and Protecting Finances During Divorce

When you find your person and fall in love, the next step is often getting married. After saying those wedding vows, you’re ready to start your happily ever after. You establish your household, merge your finances, and start family planning together.

No one ever plans for what comes next when divorce becomes a part of the reality. Not only is it filled with unplanned twists and turns, it can go on for months or even years. It’s an exhausting and often painful process.

One of the more complicated parts involves divvying up property and assets. Here’s a helpful starting point for how to protect your finances during your divorce.

Make a List of Your Assets

Many couples don’t fully realize the extent of their assets or how much money they have. Knowing and understanding your asset situation can be a helpful advantage. You can’t protect what you don’t know you have.

Go through the balances of all of your accounts, starting with your bank checking and savings. Don’t forget to account for any retirement and investment accounts.

Make a side note of any premarital assets or inheritances that are yours.

Track Your Expenses

As you move through the initial phases of divorce, a good habit to get into is tracking your expenses related to your income. Having a good understanding of your spending habits can help to create a post-separation and post-divorce budget. Going from a double income to a single income can be quite an adjustment period.

Start with your monthly bills, routine necessities like gas and groceries, and any health related expenditures. Move on from there to subscriptions and “luxury” purchases that may be cut down if needed.

Spend Mindfully

There’s a lot of red tape and logistical issues when going through a divorce. Being a spouse that carelessly spends money may not look favorable.

Be mindful about what you spend money on and how much you’re deducting from those joint accounts. The court and judge will evaluate those with a fine-tooth comb, so you want to be prepared.

This also applies to any larger purchases. This isn’t a time to make big financial decisions or decide to switch things up. Doing so could have a negative impact on your asset allocation in the end. Consult with your lawyer if you do need to make a significant purchase.

Start Separate Bank Accounts

You may not be able to instantly separate your joint accounts, but you can open new ones that are solely yours if you don’t have them already. If you do have them, start directing your money into them going forward.

Keeping all of your money in a joint account leaves you running the risk that your spouse will withdraw it. While it isn’t a desirable act in court, it doesn’t always deter a disgruntled spouse from doing it.

Whether or not you decide to utilize an individual account, it’s a good practice to inform your spouse and be transparent about your moves.

Review Your Estate Plan

Certain legal documents are often forgotten about due to their “out of sight, out of mind” natures. You’ll want to remember to revisit your beneficiary designations for any accounts. You should also review your living will and any power of attorney paperwork.

With your new life changes, you want to ensure your assets are set up to reflect any new wishes.

Find Help for Coping

Divorce is a big life step and a loss that needs to be grieved. There’s a lot on your plate that you didn’t necessarily ask for.

Being able to juggle the emotional stress while handling financial matters can be difficult, but it’s helpful to keep a clear head. Therapy can offer a great outlet for developing coping strategies, so you can be the best version of yourself throughout your divorce proceedings.

To learn more about my therapy services for divorce recovery and how I can help, contact me today.