According to studies made by the American Psychological Association, 40% to 50% of marriages end in divorce. And if you bother to ask anyone who’s been in this situation, you’ll find out that this experience is no walk in the park.
If this is happening to you, at least you know you’re in good company. Everyone that gets out of a divorce is financially damaged, but once the dust settles, you might realize your spouse left the marriage in an excellent financial shape, while you are left in ruins.
If that is a matter of concern for you, here are some tips on how to save your assets during a divorce:
- Learn how much money you possess – Before you initiate your divorce papers, it’s important to find out what money you and your partner have.
- Don’t hide your money – If you hide your money, it may lead to the loss of any credibility in front of the most important person in your divorce: the judge.
- Have separate bank accounts – Start working with your spouse to separate your bank accounts. Like this, you’ll avoid any concern that the other spouse will secretly withdraw money out of it.
- Create an emergency fund – In case anything happens, it’s best to have a savings account as an emergency fund. And this is a good idea for happily married couples as well.
- Get yourself a divorce attorney – There are two possibilities in this scenario: either you and your partner will get along well, and you’ll have an uncontested divorce, or emotions will run high, which means you’ll absolutely need to hire a divorce attorney.
- Make sure you fill out the paperwork correctly – The best way to be sure that your paperwork is filed correctly is to hire a divorce attorney or divorce coach. Why? For example, if you and your spouse are splitting retirement or pension plan, your lawyer will know how to file a QDRO with the courts.
- What about your own insurance? – If you benefit from life insurance, and your spouse is a beneficiary, you might want to change it and add someone else instead.
- Think about taxes – This might seem uncomfortable, but when you and your spouse are splitting assets, you need to make sure you’re not taking only the ones that have not been taxed, while your spouse gets the tax-free assets.
- Consider everything when you discuss child support – When you discuss receiving child support, you need to take into consideration any extra activity or big purchases you might need to pay for in the future. This way, you’ll avoid going back to court, asking for more money to cover up the costs.
- Take a rational decision about the house – It’s impossible not to get emotionally attached to the home you and your spouse shared, but don’t let it cloud your judgment. Make sure you don’t burden yourself with extra taxes and mortgage payments just because you don’t want to consider downsizing to a smaller place.
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