How to Protect Your Money During Divorce

If you’re going through a divorce, you’re probably concerned about your protecting your personal assets during the process. The more you understand about the process and how you can protect yourself, the better.

In this article, we’re taking a closer look at how to protect your money during divorce.

How to Protect Your Money During Divorce

Divorce is rarely easy, even when both parties agree to the terms and wish to go their separate ways. But when one or both spouses attempt to abuse the divorce process out of greed or anger, things can become even messier. This is especially true where money, assets, and income is concerned.

One spouse may try to lay claim to assets or money that doesn’t belong to them. Or, the other party might try to hide assets and play “broke” in order to win a larger alimony payment after they leave. Or, a stay-at-home parent might try to demand a far larger share of the household income than they deserve.

Issues like these are incredibly common, which is why lawyers almost universally recommend doing everything you can to protect your money during a divorce. But you can’t just hide your assets away and pretend they don’t exist, either. We’ll tell you what you can do and how to do it right in this guide.

Open Your Own Accounts

If you’ve relied on joint accounts throughout your marriage, you may be used to sharing financial information with your ex. You should continue to maintain these accounts until the divorce is finalized and/or you both agree to close them.

However, that doesn’t mean you shouldn’t start setting up your own individual finances in the meantime. Open up your own bank account, savings account, and/or credit card account (if applicable). Put them only in your name.

Then, withdraw a reasonable amount of money – usually defined as less than half of the total balance – from the joint account and move it to your new account instead. Be absolutely sure that you advise your spouse of this move before you do it, not after, or they may perceive it as a malicious attempt to siphon funds. Your lawyer can help you negotiate this process if you need help.

Be careful to leave enough money in the account to cover any expenses you both share – a bounced bank account is not the goal.

Close Joint Accounts

The next step is to close any remaining joint financial accounts you might still share with your ex-spouse. This includes everything from bank accounts to credit accounts, utility bills, mortgages, and insurance policies.

If there are outstanding balances on any of your joint accounts, these must be paid before you close them. Remember that you are jointly responsible for these debts, and you do not have to shoulder the entire debt yourself just because you want to close the account. Still, it may be better – and safer – to just pay off small balances yourself than to risk waiting on a spouse who fights you all the way to court.

For bank accounts, know that you cannot simply walk into a financial institution and close a checking or savings account without your ex. He or she must agree to close the account and usually be present at the time of closure. But this doesn’t mean you don’t have any recourse at all if your ex refuses to comply.

Notify the bank in writing of your intention to remove yourself from the account or accounts. Specifically state that you refuse to be responsible for any additional debts accumulated outside of the existing balance. The bank may agree to remove your name on this basis alone. But even if they don’t, having your letter on file affords some protection for you if your ex tries to create more debt.

Protect Your Personal Assets

Any item that belonged to you prior to the marriage, and/or which you specifically received as a gift, and/or which you purchased yourself using your own individual source of funds, is not generally considered a shared asset in a divorce. Of course, that won’t stop a malicious spouse from trying to lay claim to them or even destroy them if tempers and emotions run high.

You should secure items like these in a safe location outside of your shared home whenever possible. Rent a safety deposit box at your local bank or a storage unit if necessary – or bring the items to someone you trust for safekeeping. Keep a full inventory of all items in your collection at all times in case anything goes missing.

Stocks, bonds, and deeds also fall into this category but might be considered joint assets in a divorce. Your lawyer can best advise you on how to protect them without being accused of purposely hiding assets. He or she may even agree to hang on to the documents for you in safe storage until your divorce resolves.

Work With a Lawyer on Shared Assets

Shared assets belong to both you and your spouse. The most common examples are the home you live in, any savings accumulated during your marriage, any vehicles listed in both of your names, pets, electronics, and just about every other item you purchased together while married.

In a divorce, you do not have the right to seize these assets entirely for yourself. But that doesn’t mean you should simply ignore them until you find a way to agree on how to disperse them, either. An ex-spouse who is hell-bent on revenge may seek to destroy or use up shared assets before the divorce finalizes in an effort to hurt you.

The problem with shared assets is that they are often more difficult to secure than individual assets. You can’t, for example, just withdraw everything in your savings account and call it a day. This may be considered theft, which is a chargeable offense under the law. Nor can you simply sell or drive away with your shared vehicles, either, as the same issue applies.

What you can do is work closely with a divorce attorney who understands how to temporarily protect or disperse shared assets through mediation. This is often as simple as having the two of you sit down together and decide who keeps which assets – or at least how to share them. You’ll both then sign a contract to show proof of the agreement, which means no one can come back and deny it later.

If your spouse is particularly abusive or causing constant problems with assets, the lawyer might even recommend seeking a temporary freeze on funds and/or a restraining order against your spouse. Both of these can be used to secure mutual assets in an emergency.

Conclusion

The biggest takeaway here is that even the calmest mutual divorces can devolve into fighting and arguments where assets are concerned. You might be tempted to save a few dollars by processing your divorce yourself, but is it really worth the risk? Can you really be sure that your spouse won’t try to manipulate the situation?

Working with a lawyer ensures your assets are protected. But it also provides a calm, neutral third-party who can help you communicate your goals, protect your rights, and find a resolution that works for both of you. That just might end up saving you more than you spend on the cost of legal services in the long run.