You do not need to lose your shirt during your divorce. Here are 10 ways that you can ensure that you protect your assets.
Smart Way #1: Try to settle your divorce amicably. The more acrimonious your divorce, the higher your legal fees will be. If you and your spouse can negotiate issues rather than go to trial, you can save tens of thousands of dollars.
Smart Way #2: Stay involved with the family finances. It is common that one spouse looks after the family’s finances and the other spouse does not get involved. However, if you are not involved, you will not know what your spouse’s financial situation actually is and you can easily be cheated.
Smart Way #3: Have a Prenuptial Agreement prior to getting married. The way the law divides assets when your relationship ends may not be the way you think is fair. By entering into a prenuptial agreement at the beginning of your relationship, you and your partner can agree on how the assets are to be divided if things do not work out.
Smart Way #4: Evaluate joint bank accounts. If you simply ignore your joint bank accounts, you may find that your spouse has taken all the money.
Smart Way #5: Cancel joint credit cards, lines of credit and loans. If permitted, this should be done as soon as possible so that you are not held responsible for large bills run up by your spouse.
Smart Way #6: Protect yourself from joint loans. As part of a marital settlement agreement, your former spouse may be required to pay a joint loan. However, no matter what the agreement says, you are still liable to the lender. You should protect yourself by notifying the lender that this is the case and try to obtain a release. If you are unable to obtain a release, ask the lender to notify you immediately if your spouse defaults, so that you can institute timely legal action against your spouse.
Smart Way #7: Inventory property. Create a complete and accurate inventory of your property and your spouse’s property to ensure that the property gets divided fairly.
Smart Way #8: Use mediation. Mediation is the most cost-effective way of settling the legal issues when you separate.
Smart Way #9: Secure jewelry, artwork and other valuable moveable objects. Valuables have a way of disappearing when a relationship breaks down. If you believe this may happen, you should take steps to protect your valuables.
Smart Way #10: Ensure that separate property remains separate. Certain types of money – such as life insurance proceeds, inheritances, and personal injury awards – are separate property. To ensure that this is the case, keep these monies separate from other monies.