Checklist of financial assets to guard from your spouse
Recently updated on December 6th, 2023 at 12:18 am
Let’s just admit it that a marriage indirectly revolves around finances, abundant finances mean less management issues whereas less finances require more consideration and management. Now, divorce is not one of the most anticipated events in one’s life but that does not mean one cannot guard his/her finances from the spouse. To get a better understanding of how to guard your finances we have compiled a few key points supported by the laws to help you out in this difficult time.
Change you beneficiary details with immediate effect
Doing so might not seem polite at that time but truthfully, small changes like these can save you from bigger problems in the future. This update should be done on all accounts e.g. life insurance policies, investment accounts, the deposits and retirement accounts. Also, if you think of changing your name after divorce then update your name on accounts accordingly to avoid inconvenience.
Make your own health insurance plan
One of the major expenditures in the states is hospital fee and health insurance which is why you need to have a fool proof shot at this one. If you are seeking benefits from your spouse’s health insurance then during the process you might not be compensated through your spouse’s insurance. Devise your own insurance plan and save yourself from dependence.
Use knowledge as Financial Protection
Adequate knowledge about the finances is the key to better understanding and leads to protecting your finances in a better and systematic way. Gather account statements for each deposit, retirement, brokerage, mortgage, credit card, and loan account you and your spouse have. Make copies of deeds, wills, marriage, and birth certificates. Because much of this information may be required in divorce proceedings, creating a simple spreadsheet with account numbers, creditor names, balances, and date of the balance can keep you organized.
Review any new account statement as they arrive and maintain all current records. If your spouse pays from a joint account other than the legitimate expenses then by law, the court can order your spouse to reimburse the marital estate. In this case the law and court will give verdict in your favor. But to avoid such a position you must separate finances beforehand, it will not only save you time but also reduce your chances of getting into more legalities other than the existing ones.
There’s more than just closing Joint Bank Accounts
Ever thought closing a joint bank account might be difficult than opening one? This is because most banks would not close the accounts down that are low on credit or are under debt. To ensure you are debt free, keep a check on the balance and transactions made by your spouse until the account shuts down. Keep receipts of all the transactions, especially the ones which were made by your spouse, this will be taken as a pre distribution to each spouse upon the final completion of property division.
Obtain a copy of your credit report to make sure you have accounted for any loans and credit accounts that you and your spouse share and to confirm whether or not you owe them anything, this is as essential as breakfast, quite literally.
Also, closing down a joint account might lower your credit score, to avoid that, it’s better if you take a court order that prevents the account from the accumulation of more debt in it. If you are afraid that your spouse might open a new credit line in your name, it might also help to initiate a security freeze with the credit bureaus. While this may add extra hurdles to opening your own legitimate credit (until you have it removed), it will prevent new creditors from accessing your credit report without your express approval.
Set a budget for Post-Divorce finances
Divorce rarely elevates anyone towards a better lifestyle; instead it limits your expenditures since it gets difficult to run two households than one. To avoid running into debts, plan a budget line that reflects your new living expenses and income. Proactively adjust your lifestyle as necessary to ensure you don’t fall into debt or otherwise hinder your future financial security.