Getting a divorce can take an extreme emotional toll on everyone involved and it can also pack a wallop when it comes to your money. Even if you don’t have a substantial amount of assets to divvy up you need to be prepared to untangle the knots of shared financial responsibilities. Doing as much as you can to separate things before divorce proceedings begin can save you a lot of time and headaches in the long run. If your marriage is on the rocks, here’s what you can do to protect your finances.
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1. Track Down Your Accounts
Before you can begin separating his from hers you need to take stock of all the assets and liabilities you’re responsible for jointly and individually. This includes bank accounts, investment accounts, credit cards, real estate and any other property you own. You need to know what each asset is worth and how much debt you’re dealing with.
You’ll also want to make a note of any accounts that list you or your spouse as beneficiaries for one another, such as life insurance or retirement accounts. Making copies of tax returns, bank statements and pay stubs is also a smart move.
2. Protect Your Credit
In marriage, it’s not uncommon to have at least a few shared accounts, including credit cards or lines of credit. When you’ve decided to part ways, one of the most important things you need to do is close any joint accounts to prevent your spouse from racking up additional debts that you could be held responsible for.
It’s also a good idea to get copies of your credit report from each of the three major credit reporting bureaus to make sure your spouse hasn’t opened any accounts in your name that you aren’t aware of. Once you’ve closed down the joint accounts you can open up new ones in your name only.
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3. Check Your Insurance
If you were covered on your spouse’s health insurance plan while you were married, you’ll need to see about getting your own policy after your divorce. The first place you’ll want to look for coverage is through your employer but if your company doesn’t offer insurance you’ll have to shop around for an affordable policy.
You’ll also want to review your car insurance coverage if you’re both on the same policy. If your vehicle is titled in both your names you’ll have to have it retitled before you can coverage in your name alone. Finally, you’ll want to consider the changing the beneficiaries on your life insurance policy if you’re worried about your future ex-spouse cashing in if something happens to you.
4. Go Over the Bills
In many marriages, the responsibility of paying the bills each month falls on one spouse. If you were the primary money manager you have a little bit of an advantage since you already know what’s coming in and going out each month. If you weren’t directly involved in paying the bills your task may be a bit harder.
You need to know what bills are due and when as well as what account they’re paid from. You also need to know which bills are paid in your name, which ones are in your spouse’s name and which ones are paid jointly. If you’ll be setting up house somewhere else, you’ll want to make sure you have your name taken off any bills associated with your previous residence.
5. Get Professional Advice
Even if you and your spouse are handling things amicably there’s always the possibility that things could get ugly before the divorce is finalized. Speaking to a divorce attorney about your situation can give you some insight into what your rights are and assist you through the process if things hit a snag.
If you’re tight on funds, look around for an attorney in your area who offers free consultations. Even if you end up going it alone you’ll at least know where you stand when it’s time to work out the details.
Going through a divorce is never easy and when money becomes a subject of contention it can quickly spiral into a nightmare. Taking action as quickly as possible may help to cut down on the conflict and minimize the damage to your finances.
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