Although divorce is emotionally demanding, you shouldn’t let your feelings win out over your financial security. When a marriage ends, you should maintain equal rights over the properties you acquired jointly, as well as money, assets and child custody. You also have the authority to ask for money from your spouse. However, there may be instances where you suspect your partner is hiding money or other assets which can lead to a conflict-riddled separation. In such circumstances, it’s best to take precautions prior to filing for divorce. By doing so, you not only safeguard your future but prevent unwanted hassles and arguments that delay the whole process. If you are confused about where to begin then this blog post is all you need as our family lawyers outline important tips to protect your money during a divorce.
Expert Tips to Protecting Your Money in Divorce
Here are a few ways to help you safeguard your money during a marital breakdown.
Open Personal Bank Accounts
Everyone should have a personal banking account; if not then you should open one immediately. It’s best to opt for both a chequing and a savings account where you can deposit your money. But don’t forget to inform your spouse about this and give them an accounting of how much money you will be depositing. In this way, you won’t be accused of hiding marital assets.
Important Note for Stay-at-Home Moms
If you are a stay-at-home mom, your husband’s money will be your money. The decision was made jointly where you stay at home to look after the children while your husband works to cover the expense of a house and his family. Just because you don’t have a separate income doesn’t mean you don’t have money to safeguard. Therefore, you and your children are entitled to financial support from your partner even after the divorce is finalized.
Close All Joint Credit Accounts
Before separating, it’s wise to close all joint credit accounts. Debts need to be paid off; if not, then either of you can take ownership of the account. For instance, if you’re unable to pay off the amount owed, then you should consult with your creditors and find out the steps needed to remove your name from the account. After all, having fewer debts will ensure that you experience less stress during the settlement and negotiation. In addition, if you don’t have an income, you can ask your partner to help you remove your name from the joint account. This can be done under the condition that you will pay the marital debt later when you start working.
To protect your investments or money in joint accounts, you can make it a condition that both partners’ signatures are required to transact money.
Don’t Collect New Debt
As filing for divorce incurs attorney, court and other legal fees, your aim should be to save as much as possible. That’s why you should only have one credit card, to remove the temptation to withdraw money unnecessarily that will impose a debt later in your single life.
Get a Copy of Both Credit Reports
You have the right to know your spouse’s credit score. With this information, you will know whether they have opened a new account about which you are unaware. You can also find out if they’ve made decisions that may negatively impact either of you.
Gather Proof of Valuable Items or Assets
During marriage, you accumulate valuables and make joint investments. In such scenarios, you should have proof of these assets purchased during your marriage or copies of bank and investment account statements. Keep all essential paperwork and receipts in a safe place if you’re going through a rough divorce.
Most of us are aware of the term alimony, but do you know that it’s considered taxable income? This might be a problem if you’re unemployed. Even if you do work, taking alimony may not be advisable. Hence, try to negotiate with your partner out of court and not label the settlement as ‘alimony’ in legal documents.
Find Out the Value of Retirement Accounts
Do you have a retirement account? Does your spouse have one? In either case, you should be familiar with the value of both accounts as retirement funds are usually a couple’s biggest marital asset. After you know their value, you may be able to get it equally divided during your divorce, based on your province’s laws. With this knowledge, you can avoid being taken advantage of.
And that’s how you can take care of your money when filing for divorce. However, make sure you have enough cash before separating as you will need to pay court, attorney and legal fees. You may need a new place to live as well. That’s why it’s wise to have enough money and living expenses for at least three months prior to filing for divorce. Thereafter, consult with a family lawyer who will guide you through all legal formalities and help in negotiations. In addition, your attorney can play a major role in winning you a fair settlement from your (former) partner.