When John and Emily married 15 years ago, they both thought the marriage would last a lifetime. After 10 years in a colonial-style home, 2 children and 3 dogs, their marriage looked picture perfect, especially with the white picket fence that surrounded Emily’s prize winning roses. Last year, John lost some investments and started gambling to ease his stress. His secret gambling made financial issues even worse. Emily, unaware of their family’s financial distress, continued her duties as a homemaker and volunteering at her daughter’s school. Had Emily known of the financial distress, she would have taken a job to help ease some of the debt, but because John was always in charge of finances, Emily had no idea of how bad their situation was. One weekend, John had gone on a “business trip” (which ended up being an expensive trip to Las Vegas) and Emily was unable to withdraw funds from an ATM machine. Shortly after John’s unsuccessful gambling trip, there marriage began to fall apart and divorce seemed to be the best option for their young children. Because Emily has little control of their money, she doesn’t know how to proceed with protecting her assets during the divorce. Charles Ullman and Associates understands that during divorce, life has been turned upside down and can cause financial and emotionally challenging moments. What can Emily do?
Avoid Losing Everything: Protect Your Assets
Often times, in a marriage, one spouse takes charge of finances. Unfortunately, in the event of divorce, the other spouse has no idea how to deal with their finances, leaving her/him at great risk for financial distress after a divorce. Protecting your assets during divorce can make the whole process a little less stressful:
- Familiarize Yourself with Financial Statements: Financial statements, tax forms and other important financial paperwork can be overwhelming, hard to organize, and even harder to understand, but it’s helpful to know how your household’s income is being spent. Even if you are not the “breadwinner”, you have the right to know where the money goes. If you find something suspicious or something you don’t understand (and don’t feel comfortable confronting your soon-to-be ex), talk to a financial planner, lawyer or accountant. Additionally, make sure you make copies of all the financial information and keep it in a safe place. When you meet with your divorce lawyer, he/she will help you decide what information you will need for your settlement. It’s better to be over prepared than not.
- Establish Your Own Credit: If you have a shared credit account with your spouse, it’s important to pay close attention to credit card statements, as one spouse may use a credit card more often than the other. If your spouse has poor credit, it may affect you, even after the divorce. If you are able, try to get your own credit card account before you divorce. While may stay-at-home, non-income earning spouses find it difficult to establish credit, The Credit Card Accountability Responsibility and Disclosure Act (CARD Act) made changes allowing non-working spouses set up their own line of credit, according to the Consumer Financial Protection Bureau. Additionally, it may be wise (if you don’t already) to set up your own bank account.
- Make Sure Your Name is One Everything You Own with Your Spouse: Depending on what you purchased together, if it is a valuable asset, make sure that your signature (as proof of part ownership) is on all the proper documents.
Divorce can be a financially, emotionally, and mentally exhausting process. While you should always have a good handle on your finances, even if you don’t make all the money, it is even more important during the separation or divorce process. Don’t let your divorce leave you penniless and powerless; get your documents in order!