Payne & Associates, PLLC

A divorce, whether contentious or not, is not only an emotionally difficult time but also one of the most financially traumatic things you can go through. Having the division of property, credit management, taxes and possibly moving expenses to contend with while emotionally vulnerable, it is easy to make a misstep while divorce looms. While it does matter if your separation is an amicable parting of ways or an adversarial contest of wills, in either case there are a few steps you should follow.

1. Identify and document all assets

The divorce process entails an equal division of marital assets, but in order for that to happen, it is important to know what those assets are. Collect all available financial records, make copies and if your divorce may grow contentious, store those copies outside the reach of your spouse.

Apart from compiling copies of deeds, titles and tax documents, you should create a video or photo inventory of valuables. If your divorce is on friendly terms, you and your spouse may do this together as you explain the ownership of each asset.

2. Protect and build credit

If you and your spouse hold joint credit card accounts, divorce is a good reason to cancel them. You are still responsible for charges made on a shared card even after a divorce, so protect your credit history both from financial hardship and vindictiveness. If you don't have any personal credit history, now would be the time to open a new card in your own name while still married.

3. Approach taxes strategically

If you continue to file your taxes jointly until the divorce is finalized, you can enjoy the corresponding tax breaks. But if you have reason so suspect your spouse of tax fraud while in the process of separating, it is not worth the risk to sign your name to the any joint tax returns.

4. Create a financial safety net

Control over a bank account, shared or otherwise, can be a weapon one spouse uses in a contentious divorce. You can protect yourself from financial extortion by opening an individual account at a new bank and parking some money there. Even after an uncomplicated divorce, you will soon need your own financial independence.

5. Divide for the long-term

A divorce settlement aims to equally distribute assets, but an equal distribution may not also be a fair division in the long-term. A cash settlement may be worth more now than an apartment, but the apartment's rental income makes it a valuable income-generating asset while the cash will only depreciate through inflation.

6. Sign documents carefully

Last, remember never to sign any agreements without your lawyer reviewing them first. If you do, it is possible you could be forfeiting rights and property than can no longer be recovered later in the process.

No Comments

Leave a comment
Comment Information

Payne & Associates, PLLC
206 North Spruce Street, Suite 1B
Winston Salem, NC 27101

Phone: 336-283-2937
Fax: 336-217-8784
Winston Salem Law Office Map