5 Tips for men to protect their ASSets while going through a divorce
Divorce can be a one-two sucker punch. First comes the emotional pain, and then the financial reality of what you are about to lose and spend on your divorce.
It’s time to get your ducks in a row with your finances. I am not an attorney, however, as a divorce coach, I’ve worked alongside many attorneys who have given me tips and advice to give to my clients. The following are the tips I consider to be of the utmost importance:
Tip #1 Legally establish the separation/Divorce. Once the decision of divorce is made, it’s time to put the separation in writing and in motion ASAP. Having this in writing in your financial files helps protect any money you make after that date. If you’re separated for months before the divorce proceedings begin, that income is yours. Otherwise, if you don’t make the separation legally binding, that income could be subject to be split down the middle. This date also applies to decisions involving child support and alimony.
Tip #2 Safeguard all personal papers and make copies of the important ones. Gather all financial records for the past 3 yrs. This includes tax returns, bank and credit card statements, retirement and investment accounts, real estate records, titles, deeds, and W2 statements. Also, birth certificate, passport, college diploma, and any other personal documents you would not want to see destroyed. Make sure you store them in a safe location, I highly recommend getting a safe deposit box at your local bank. The more paperwork you have, the better prepared you’ll be.
Tip #3 Move half of the joint bank balances to a separate account. Make sure you read that again. Move only half of the money to a separate account. Whatever you do, don’t drain the accounts, take only your half even if you were the sole breadwinner in the household. Courts do not look favorably on spouses who drain the accounts leaving their partner with nothing to survive on. As soon as you’ve done this, make sure your income from employment is deposited into your new account. Too many times I have witnessed clients trying to pick up the pieces after their ex has drained the account of everything. The leading cause of financial chaos during divorce is when spouses continue to have access to joint accounts. I recommend untying all accounts ASAP.
Tip #4 Cancel all jointly-owned credit cards. Your spouse can and most likely will, keep spending on those cards. If the card is still jointly owned, you are both still responsible for the debt especially if you are not yet separated or divorced. Avoid keeping joint credit cards, even with a verbal agreement to pay, otherwise, when things go wrong, you’re going to be left responsible for that debt since credit card companies do not care about divorce.
Have a discussion with your spouse to inform them of your intention of canceling the cards before you do it. You don’t want to blindside your spouse which in the end will not look good for you in the eyes of the court.
Tip #5 Make records of all marital property: Go through your home and make a video of all its contents. Make sure the date function is turned on so there is no argument of how old your videos are. If the contents should suddenly “disappear” at least now you will have evidence of what is missing. Again, store this video somewhere safe, not just on your phone where it may be deleted. For your valuable personal property, I recommend you store it safely out of the home. If you have a watch collection or the baseball cards your father gave you, make sure it’s not just left in the home only to be possibly taken out of anger by your spouse. This applies ONLY to your personal property, NOT community property.
As a divorce coach, I recommend my clients identify 2-3 key financial matters to help focus negotiations and go into this with a clear idea of things that are most valuable to them and then go after them.
The Divorce Coach for Men