3 Tips For Making Your Personal Finances Divorce-Proof
While no couple enters into the bonds of holy matrimony with the intention of ending the relationship in divorce, that is exactly where some relationships do end. Going through a divorce can be emotionally and financially taxing. It can be challenging to mitigate the emotional damage caused by a failed marriage, but you can protect your personal finances from disaster by divorce-proofing your income.
Here are three tips you can use to divorce-proof your personal finances in the future.
1. Talk to your soon-to-be ex about joint accounts.
Even if your divorce decree states that you are not responsible for the payment of a specific debt, non-payment by a former spouse could affect your credit rating if the account is joint. It's important that you take the time to sit down with your soon-to-be ex and discuss who will be responsible for the repayment of joint accounts.
Whenever possible, have your spouse open a separate and individual line of credit that can be used to pay off joint accounts, and you do the same. Eliminating these joint accounts by consolidating your debt into individual accounts will protect your personal finances in the future.
2. Remove your spouse from your individual accounts.
As you prepare to go through a divorce, you should evaluate the status of your personal accounts. If you have any individual accounts where you have listed your spouse as an authorized user, you should revoke this authorization as quickly as possible.
This will prevent your spouse from running up the balance of the account without your knowledge and help you preserve your financial assets as you work your way through the divorce.
3. Divert retirement contributions.
One area that many people fail to consider when going through their finances to prepare for a divorce is retirement accounts. If you and your spouse are both contributing to a mutual retirement account, you should stop making these contributions as soon as you know you will be filing for divorce and have your contributions diverted to an individual retirement account instead.
You will need to ensure that you go over your contribution history with your lawyer in order to gain access to your share of the retirement fund after your divorce is finalized.
Going through a divorce can be difficult, and the financial challenges that often accompany divorce can make a bad situation even more challenging. Be sure that you discuss joint accounts, revoke authorization on individual accounts, and divert retirement contributions to protect your personal finances during a divorce. If you have other questions, click here for information about protecting your finances during divorce.
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