Married couples fight a lot over financial issues. Financial problems are the second leading cause of divorce, behind infidelity. According to insider.com's statistics on why people get divorced, 36.1% of married couples divorce due to financial problems. Having conflicting money spending habits contributed to high levels of stress and tension.
Most couples try to avoid financial arguments by maintaining separate bank accounts. No harm, no foul. However, there's no guarantee that keeping different accounts will help you to prevent money and relationship problems down the road. It is wiser to have a third party that can make unemotional decisions about your money and helps you steer the course of such conversations. So, how do you protect your money in a divorce?
Ways to financially protect yourself from losing everything in a divorce
Know What You Need
Think about the future and evaluate the things you will need. When you are not sure about what you need for the long-term, you could be approving a divorce settlement that you may not be able to deal with.
You may want to ask yourself, "How much do I need to support myself? How much child support do I need?" For this process, it is essential that you work through a lawyer. Lawyers aim to get the best deals for their clients.
Make Clear What’s Yours And Name Your Assets
How much money do you have? Where do you keep it? Separate what’s yours from what belongs to your partner, including bank accounts, mortgages, investments, and any other assets.
During a divorce process, it all goes down to the basics of the dollars and cents. Moreover, your attorney will request a list of all your assets and liabilities.
To be on the financially safe side, get your current statements of valuable assets, and get the details verified. Having a good financial statement is a sure way to get a favorable settlement.
Make Copies Of Your Financial Statements
Have a checklist of all your financial information and documents that can help in a settlement. Put together all your bank account statements, brokerage firm statements, tax forms, and all other financial documents that you have signed within the last few years.
Put everything down in writing, and keep printed as well as electronic copies of your financial documents. When you have financial statements that show proof of your possessions, you will avoid the risk of losing all your hard-earned money.
Have A Legal And A Financial Support Team
Having your own financial adviser can be the difference between an agreeable settlement and a disaster. Therefore, invest in a trusted financial adviser. The adviser should be a person that you can trust, and who can clarify things to you in a way that you understand. Financial details can be hard to understand, especially if your partner was the one handling all the money.
Avoid making the easy mistake of seeking financial advice only after the divorce, once things have gone crooked.
Make Sure You Have Enough Money To Cover Your Bills In The Meantime
During the divorce, you will have to make many decisions that may affect your financial security. The last thing you want is for your partner to leave you with no money. Put aside enough money that will help to cover your bills until the time when divorce lawyers can get involved. However, do not wipe out the account, especially if you have a joint statement with your partner.
Having cash is essential, and saves you the time you'd have otherwise used in getting temporary alimony.
Know The Divorce Property Rules Of Your State
According to lawyers.com, on the basis of divorce, each state has requirements that you must fulfill for your divorce to be valid. That means you must show that you qualify for divorce by satisfying the residency requirements and reasons for divorce. Additionally, you must inform your partner that you filed legal action.
Because divorce laws differ from state to state, you have to know precisely what you are getting into. Marriage is two-way traffic, and you have to figure out how to manage your finances in a productive way. However, to protect yourself in the event of a divorce, get your finances in order.