Divorce can be messy and financially disastrous. According to research, the number one reason couples divorce is due to financial issues. Unfortunately, the decision to divorce has the potential to financially ruin one or both spouses. To prevent this type of scenario, divorcing couples should consider taking the following steps to make sure their assets are properly protected before, during, and after the divorce.
Change Credit Accounts
If you allow your spouse access to your credit card accounts, it’s important to take action immediately to deny your ex-spouse access to these accounts. Scorned spouses often try to exact revenge on their former partner by ruining their credit or going on a spending spree before the divorce is finalized. As soon as it is apparent that divorce is on the horizon, credit card holders should change their information to prevent any “revenge shopping”.
Amend Your Living Revocable Trust
As the owner or settlor of a revocable trust, you will be able to revoke your ex-spouse access to this trust in the future. Making amendments to a living revocable trust guarantees that the settlor will be able to recover their assets during a divorce. By consulting with a living trust attorney, you’ll be able to make sure your assets are protected throughout the divorce.
Put Your Name on All Titles
Splitting property is almost inevitable during a divorce. If you own your house, car, or other assets, it’s important that the titles reflect this. Ensure all legal documents reflect this ownership to make sure these assets aren’t divided during a divorce. Many couples that are amicably divorcing choose to transfer ownership of property using quitclaim deeds during the divorce. If possible, consider doing similarly to simplify the divorce proceedings.
Dismantle Joint Accounts
While amicable divorces may make it easier to speak with an ex-spouse about closing joint accounts, taking the initiative to dismantle these accounts is an essential step in protecting your assets during a divorce. In the worst-case scenario, an ex-spouse may try to drain joint bank accounts prior to filing for divorce. As soon as it is clear that a divorce is inevitable, it’s important to dismantle these accounts. Though one spouse may be legally responsible for paying existing balances, closing these joint accounts will make it easier to financially separate from each other.
Don’t let divorce ruin you financially. Take these four proactive measures to make sure your finances are properly protected at this time.