Divorces can be an emotional rollercoaster, and that’s putting it
lightly. What most people do not immediately understand, however, is that
divorces can significantly strain a person’s financial situation.
Apart from the legal fees involved, many people are surprised by the overall
financial implications of a divorce. Save yourself the headache of having to
deal with both divorce proceedings and sorting your finances by following these
quick tips:
Don’t Hide Assets
It’s tempting to hide assets, especially if you and your spouse cannot
agree on how to divide property. Resist that temptation. Hiding assets or
“selling” them to someone with a plan to “buy” it back after the divorce is
finalized is illegal.
Change Beneficiaries
For documents such as life insurance or 401(k) plans, make sure you take
the time to change the names of your beneficiaries. The last thing you want is
to realize too late that the wrong person will benefit from these plans.
Clear Joint Credit
Debt
Before you start with divorce proceedings, you will want to eliminate any
debt that you have racked up with joint credit. If your spouse still owes creditor
money after your divorce, you may be held responsible for paying the remaining
amount. Once the debt has been paid, close the account so there is no risk of
building debt again.
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