When you get a divorce, almost every aspect of your personal life changes, including your finances. Often, feelings of anger, bitterness, and sadness can make it difficult to think clearly and make rational decisions, leading to vulnerability.
The truth is that a misstep in the divorce process can have long lasting consequences, and one can easily make a faulty decision that they later regret. Here are some tips to help you protect your finances despite getting a divorce.
1. Get informed and stay informed. If your spouse handled the finances, you need to get familiar with them. When getting a divorce, pay attention to the following details:
- All of the accounts and their passwords
- Where all of the financial documents are kept
- The details of all assets and debts
- The details of the investments and retirement accounts
- All jointly held and separate real estate
- How the joint property is titled
2. Get your hands on the documents for all bank and credit card accounts, investments, life insurance policies, retirement accounts, mortgage documents, etc. and copy them for your records. It's even better to do this before the divorce is filed.
3. Start protecting your credit today. If possible, make a clean credit break, otherwise your credit score can suffer big time if your ex decides not to pay a debt on time or at all.
We suggest closing or individually refinancing all joint accounts, including credit cards, auto loans and mortgages. If you can't refinance a debt separately, then sell it.
4. Create a post-divorce budget before you sign on the dotted line. Remember, it's normal for expenses to increase after a divorce; it costs more to run two households than one. Things like rent, cellphone plans, and insurance usually cost more when you're paying them by yourself.
5. Don't forget to update your beneficiaries. We get it, when you're getting a divorce, your old will is the last thing on your mind, but you can't forget about updating your beneficiaries as soon as the divorce is over, otherwise, should something happen to you, a lot of money could go to your ex.
If you're like most people, a lot of your wealth is controlled by beneficiary designations in life insurance policies, retirement accounts, and bank accounts. We can explain which legal documents you may want to change so they reflect your post-divorce wishes.
For more divorce advice, contact a Schenectady divorce attorney from DeLorenzo, Grasso & Dalmata! We are available 24/7 to take your call!