There is possibly nothing worse that can take a toll your current financial situation more than divorce. Having to take one household income and spread it out over two households is never an easy thing to do, no matter how comfortable your finances are.
The woman is typically most vulnerable to financial demise in any divorce. Earning less and having more time demands that pull her away from a developing career, if women rely on their husbands as their financial safety net, a divorce can put them in financial ruin.
Whether you are looking at the prospects of splitting from your spouse or not, it is always best to protect both yourself and your assets from loss. There are ways that you can minimize the financial impact of divorce. If you want to keep your financial status safe, then these are four ways to shield yourself from the downfall that befalls many divorced people.
Keep as much documentation as you can
Many types of bills and statements come to the house monthly. Most people are in the habit of either throwing out statements or having them shredded. When it comes to assets like the 30 year mortgage rates on the home that you and your spouse pay for together, the more documentation you possess, the easier it will be to follow the money trail and not be left in the dark about hidden assets or financial windfalls that you weren’t aware of.
To protect yourself, you should always keep a minimum of three years of financial statements to provide proof if divorce is imminent. You need documents not only about your spouse’s assets but also about your own.
Keeping documents becomes increasingly important if your significant other decides to go on a revenge spending spree. The only way to prove that any purchases were made recently is to have everything documented and in writing.
Don’t downplay the advice of an attorney
Many couples who are considering separation feel as if hiring or asking for help from an attorney means that divorce is inevitable. So they avoid it out of denial. The truth is that being prepared for something doesn’t make it happen; it just helps you avoid the pitfalls if it does.
Consulting a lawyer who specializes in divorce at the first sign of trouble is the best way to ensure that, if things go south, you have crossed all your T’s and dotted all your I’s and won’t be left holding the (empty) financial bag.
Open your own accounts — credit and otherwise
If you have nothing but joint accounts, once the split happens, it can be overwhelming and difficult to open credit cards in your name. Sometimes when you divorce, it isn’t just your wallet that takes a hit, but your credit rating as well. If you establish credit on your own, outside the marriage, it will increase the likelihood of being financially secure and being able to purchase things you need after the split.
If you allow your credit cards all to be in one person’s name, they not only inherit the assets that you allocate, sometimes they can inherit your good credit. If you don’t have an established credit history on your own, or a work history, that can leave you with no financial or credit options once you make it official.
Keep an eye on your credit score
If you are not getting along and considering divorce, it is an excellent idea to keep tabs on your credit cards and your credit score. If you notice that you have suddenly gone from a 750 credit rating to a 600, then that is a red flag that your partner may be raking up the debt on your credit to stick you with huge debts.
Not only is it always a good idea to keep an eye on your score to make sure that there isn’t anything suspicious going on, but it might also save you from being taken by the likely assailant, your soon-to-be ex.
A divorce is never pretty. Hopefully, should a time come when your “I do’s” turn into “I don’t anymore” you can end things amicably. But that doesn’t mean you should turn a blind eye or be blindsided by the financial actions of your partner. Protecting your individual financial future is key to a happy and safe union, whether it lasts happily ever after or not.