How to Protect Financial Records During a Divorce
Divorce is never easy, but protecting your financial interests is an especially critical factor, as the division of property can be a rather complex matter. None of us wants to believe that our spouse would attempt to hide marital assets, sell personal or business property without our knowledge, or spend down bank accounts. Unfortunately, it happens all too often. You do have the right to protect your assets in the event of a divorce. If you think that divorce may be looming in your future, your best bet is to document everything in order to protect yourself.
Other People Are Reading
Instructions
-
-
1
Begin keeping detailed records of all financial assets at the first hint of marital problems. Find out if you live in a community-property state. If you do, all property acquired during the marriage is considered to be a marital asset, and will be split 50/50. It will not matter who purchased the property. The split is based on value and not on the number of assets each party will receive. Hire an appraiser to determine the value of any property acquired during the marriage.
-
2
Keep documentation of any marital assets in a safety deposit box, rather than in the home--especially if you suspect that your spouse may try to tamper with records related to stocks, bonds or other investment accounts. If you fear your spouse may become vindictive, remove any personal property to a safe location before discussing divorce. Another option is to take photos to prove the items existed. Again, keep the photos in a safety deposit box your spouse cannot access.
-
-
3
Open a separate bank account. You should have your own credit-card accounts, as well. In the past, many women did not have their names included on joint account, and therefore had no personal credit history when they divorced.
-
4
Close any joint accounts you share with your spouse, including checking and savings accounts, credit-card accounts or retirement accounts. Now is the time to establish individual accounts of your own if you haven't already.
-
5
Seek a protective order for property, which will prevent your spouse from damaging or disposing of property. Asking for a court order to freeze financial accounts may also become necessary if your spouse tries to remove money from any accounts. Violation of the order may constitute contempt of court, for which punishment can entail a fine or even jail time.
-
6
Try to come to an agreement between the two of you on your own. Many couples are able to settle property division in this way, compromising on what best suits both their needs.
-
7
Decide if your home will be sold, or if one of you will refinance the mortgage in your name. Many people pay the other spouse's equity in the house with money from the refinancing of the home. In addition, refinancing removes the other spouse from liability for the mortgage loan. All utilities should be transferred into the name of the spouse who is getting the house.
-
8
Change your insurance beneficiaries, retirement-account beneficiary, durable power of attorney and will. Many people forget to tend to these details following a divorce.
-
9
Consult with an attorney who is experienced in divorce settlements. Even if you try to settle things amicably between you, it's a good idea to ask for advice. You might also want to talk to a financial planner before discussing division of property.
-
1
Tips & Warnings
Since about half of all marriages in the U.S. eventually end in divorce, a prenuptial agreement is often a good idea. It allows a couple to determine how their marital assets and debts will be divided in the event of a divorce. The couple must enter into the contract before their marriage. Keep updated records of all physical assets, even if your marriage isn't in trouble. You never know when problems may arise, and you will be well-prepared if they do.
If you move out of the family home and leave personal property behind, you usually have only a short period of time to remove it before your spouse can claim it.
