How To Protect Yourself In a Divorce
According to statistics, every four out of ten marriages come to an end. You never know what is going to occur. It is so important to make sure you protect yourself when it comes to finances.
1. Separate your Non-Marital Assets
Non-marital assets are the property considered by the courts belonging to one spouse or the other and is not subject to equitable distribution. Simply put that it is not part of the assets that will be divided in a divorce proceeding. These assets includes:
• Inherited property
• Items brought to the marriage
• Gifts given specifically to one person as opposed to the married couple
• Proceeds from personal injury
In some cases, these non-marital assets can be mixed with marital assets and will be prevented from being claimed upon divorce. It is of importance to have a traceable paper trail in order to show where the assets were and where they were transferred into in order to claim it as non-marital asset.
When you commingle your own funds, the financial gifts or inherited assets with your spouse’s funds or marital funds, the opposing attorney can easily argue that those assets have become divisible marital funds because of the commingling. So, it is highly advisable to keep such non-marital assets in a separate account and have separate financial records for your assets.
Keep your real estate separate
2. Start Your Own Credit History
Some cases entails that there are people who lived their life depending chiefly on their spouse’s paycheck and were never in a position where they can build a good credit score. It is of utmost importance to establish your own credit history because these days, acquiring assets such as a credit card, new car and even mortgages will require a credit history.
It will also be wise to not start spending large amounts of money in buying highly priced items in order to keep your debt situation as simple as possible. As more outstanding debt, loans and property you have prior to divorce will only cause more intricate, stressful and time costing divorce proceeding.
4. Keep Track of Your Financial Records
Many couples have varied financial holdings ranging from checking to saving accounts. These accounts may be joint or separate accounts, either way it is useful to keep track to all accounts because when divorce proceeding begins it is common that evidence of these things conveniently disappears, leaving confusions to what you may be entitled to.
5. Have Good Timing
When to proceed with your divorce can have a considerable financial consequence. Many single income families with one spouse who have not worked or worked long enough to monetarily qualify for Social Security Benefits. However, if they have been married for over 10 years to someone who does qualify for Social Security income, then become divorced and do not remarry, then they may qualify for the qualified amount of their working spouse at age 62. In light of this, if you are in a similar situation and have not reached the 10 year mark but are closely arriving, it is in your best interest to do what you can to wait.
6. Close Joint Accounts
Like the third item on this list, if divorce is imminent to you and your spouse, it is important to be proactive and think of things that may cause additional financial burdens in the process of divorce. First, examine all the joint accounts and different ways where your spouse can run up credit card or withdraw and spend money. Freezing or closing your joint accounts can be a solution in order to keep track or keep your spouse from spending additional debt that you could be held responsible for. In the case where you will need to withdraw any money, keep a detailed record of where your money goes and prepare to account for it in the divorce process.
7. Hire an Experienced Divorce/ Mediation Lawyer
An experienced asset protection attorney will offer you effective legal ways and asset protection strategies to keep you from further asset division headaches in the divorce process. He/she will guide you to be on the right track in managing your non-marital assets and keep them separate.