How to Protect Your Finances When a Spouse Files for Divorce

Fifty percent of all marriages end in divorce.

All marriages are business deals, replete with financial contracts. Society tends to romanticize the emotional connection to the legal contract that makes two people a wedded union. But with the divorce rate at 50 percent, you could wind up being a statistic yourself. Knowing your family's finances inside and out can go a long way if your spouse files for divorce.

Difficulty:

Moderate

Instructions

Things You'll Need

• List of all bills
• Record of savings, checking, retirement and investment account
• Record of all income/expenses
• Your own money

1. Go over all of your bills, as well as all of your tax returns. Read every financial statement and find every investment that you have with your spouse. Add up all expenses, from small household bills to larger items such as school tuition. Consult your accountant if necessary.

2. Make a copy of every single financial document you can find. Copy 401k statements, checking/savings accounts, life insurance policies, house appraisals, brokerage accounts, money market accounts and tax returns.

3. Locate all credit card statements and make copies. Keep an ongoing record of spending so that you can fight liability for your spouse's extravagant purchases or bizarre debts. Check your credit report.

4. Check all property deeds to ascertain whether they're in your name and your spouse's name. Consult a lawyer if just your spouse's name is on any of the deeds. Even if your name isn't on a deed, you may be entitled to half its worth. At the same time, any property that you had before your marriage could also be considered marital property.

5. Revise your will and/or insurance policies to change the beneficiary. Revise any policies that make your soon-to-be ex a beneficiary; otherwise, if you should die, any assets will go to your ex.

6. Don't forget about Social Security. If you were married 10 years, you can receive Social Security benefits based on your ex's earnings, even if he has remarried.

Tips & Warnings

• Encourage your spouse during your marriage to put as much money as he can into a company retirement plan. The money put there leaves a paper trail, and it cannot be concealed in the case of divorce. In the property settlement, part of this money will be given to you.

• Hiring a good divorce attorney is another important step. When you see the attorney, take all of your financial information including any prenuptial agreement you and your spouse may have signed.

• Often women--and sometimes men--believe they will be awarded alimony, but many won't. Alimony is awarded by the court or in a property settlement. If you haven't been working outside of the home, you will probably have to begin after the divorce, even if you are awarded alimony. Keep your skills and resume up to date. Alimony, even if you get it, won't last forever. It usually lasts for just a couple of years.

References

• CNN Money.com: Protect Your Wallet in a Divorce
• Smart Woman Online: Protect Your Finances from a Divorce
• J.H. Rattiner. Personal Financial Planning for Divorce.
• iVillage Parenting: A Divorced Woman's Guide to Social Security

Resources

• Divorce Rate