The financial aspects of a divorce are some of the most difficult to deal with. A divorcing spouse must proactively protect assets and make some difficult financial decisions such as what to do with the marital home. Mistakes are easy to make and can leave a divorcing spouse vulnerable to an unfair division of assets.
Keep the following in mind when considering financial issues in a divorce:
- Honesty: It can be tempting to lie about both financial and non-financial information, such as cheating or the income derived from a small business. But it is easy for such dishonesty to backfire if discovered. By being upfront, a divorcing spouse is in a better negotiating position and will help to lead to a fair division of assets. Similarly, be careful with a spouse’s information and ensure that all documentation and statements are accurate.
- Know when to divorce: Many marriages end because of financial difficulties. While it can be difficult to remain together when it is clear the marriage will end, sometimes waiting a month or two to save up money – for example to be able to hire a financial expert – pays dividends in the long run.
- Protect and transfer assets immediately: As soon as you know you’re about to divorce, obtain a separate checking and savings account and cancel all joint credit cards. Even when the divorce is final an ex-spouse is liable for debts jointly accrued during the marriage, so if one spouse racks up credit card debt on a joint card the other will still be responsible.
- Get valuations: Knowing the value of a home and small business is imperative to obtaining a fair division of assets. Unless all parties know the value of large assets, there is the potential for one spouse to obtain a lesser amount than is fair, such as by not obtaining as much alimony as he or she would otherwise get.
The intent of asset division and spousal support is an equitable division of assets. This does not mean equal division, but rather a division that allows each ex-spouse to live in a financial situation that is as similar to that as he or she had while married.
Finances are just one difficult aspect of divorce. Establishing child custody and living situations are also an important part of a divorce case. However, it is easy to forget important financial aspects in a divorce, especially if children are involved, as many people concentrate on obtaining child custody and simply trying to move on with life. A skilled divorce lawyer can help to protect the rights of people going through divorce and to obtain a fair division of assets that will help lessen the potentially negative financial impacts of divorce.