How to protect your money during a divorce
A number of issues rise to the surface when a divorce is on the cards. How to manage custody arrangements, child maintenance payments and deciding who will live in the matrimonial home after a divorce are typical and understandable concerns.
Protecting your money during a divorce is another key issue. If you and your former partner have not taken out a prenuptial agreement ahead of getting divorced, you may be concerned about the division of assets such as pensions, property and other finances. We’ve listed some of the main factors to take into account.
Get valuations on your assets
Although you may have an idea of the value of your joint financial possessions based, for example, on recent house sales in your area or the property market in general, you still need to get a clearer picture on things. Items that are considered assets in a divorce include pensions, the matrimonial home, personal savings and belongings such as jewellery, furniture or collectables. Getting an detailed understanding of exactly what these are and how much each is worth will give you clarity on your financial position.
Change your Will
In most marriages, spouses will have been made a name on important documents including Wills. If you have your spouse’s name as a beneficiary and are going through a divorce, then you should look at changing this in to someone else’s name or removing it where appropriate. As well as looking to make these changes to your Will, you should also consider other policies and trusts you have.
Prioritise closing down any joint accounts
If you have any credit or bank accounts with your former spouse, then it is important to get the balance paid (if there is an outstanding amount on it) and close it down. If this isn’t possible, you can ask the provider to freeze the spending on these accounts. This will give you chance to build up your own credit history and prevent you from being liable for any future spending initiated by your ex. If you have not had credit in your own right before then it’s worth thinking about ways to start building up your own credit record as an individual.
Don’t hide your assets
Concealing your assets may be your first instinct if you want to protect your money but it is not the best idea. If later down the line, it is discovered that you have kept things hidden then you could be liable to pay fines and this will not shine a good light on you in front of the courts.
Don’t spend all your money before a divorce
Similarly, it is not advisable to spend all your money before an impending divorce, although there is nothing to hold you back, this will not lower a final settlement. The court could perceive this as a way of preventing your former spouse gaining access to finances and you could be penalised for this. Plus, your spouse could apply to the court for a freezing injunction (also known as a freezing asset order) which is a court order stopping you from handling any of your finances.
Speak to a professional
If you cannot reach decisions with your former spouse, then you can try speaking with a professional mediator to help you find the most amicable arrangement possible. You can also speak to a qualified legal professional to ensure you have the most accurate and update information, further supporting you in making the wisest financial decisions during divorce.
