For married couples, financial planning can mean looking ahead to make sure you have money for emergencies and to maintain a comfortable lifestyle. But should it also include making plans to protect yourself in case you divorce?
In an article about divorce and retirement planning, the Wall Street Journal concludes: “Whatever its other benefits, divorcing later in life is one of the worst financial moves you can make.” and adds that often divorce can lead to the financial struggles for women.
To protect yourself financially from the beginning:
Be aware of what is going on with your joint finances. Even if you let your spouse handle the finances, you should be a partner in making decisions and not be in the dark about what is going on.
Be sure that you are named on titles and deeds. CNN notes, “While many states will assume that property purchased during the course of the marriage is marital property, individual state laws can vary depending on whether you contributed money or not.”
Consider a prenuptial agreement to direct what happens to assets you had before marriage, particularly if you have children from previous relationships or other dependents.
Don’t rely on your partner’s credit history. Having a credit card or car loan in your name will mean you have your own credit history.
When you have made the decision to divorce:
Close joint bank accounts and home equity lines of credit immediately. If possible, you and your spouse should split what is left in joint accounts and open individual accounts.
If you have a joint credit card, inform your credit card company that you are in the process of getting divorce, in writing, as soon as possible. Have them freeze the account and make it clear you are not responsible for new debt.
Get the professional and emotional guidance you need to make levelheaded decisions. Even when both spouses play fair, divorce is difficult.
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Disclaimer: Claire does not offer any financial advice on this website. All information provided on the site or in this blog is for educational purposes only. Contact Claire or your financial advisor for specific advice that will fit your situation.