No matter how you slice it, divorce is never easy. It usually leads to a time-consuming and arduous legal process that can be emotionally, physically, and financially demanding. While the emotional and social implications of divorce are evident, people often forget about its financial impact. As licensed St. Louis divorce lawyers, we have seen many people squander their finances, which they could’ve better managed with a few simple steps.
If you fail to secure yourself financially during and after divorce, you will face the consequences for years to come. For example, if your financial situation after the divorce is weak, the court may offer sole physical custody to the other parent. You may also have to struggle to provide a better life for your kids and yourself if you lack financial stability, making it difficult to modify a custody decision. The bottom line is, you need to protect your finances proactively during the divorce.
Here are a few easy steps that can help.
1. Sort Out Your Finances Immediately
The first step is to start sorting your finances, especially your jointly-held monies. It is a lot easier to figure out your overall joint financial situation if you were the one handling all finances. However, if your spouse manages the money, you will need to be extra thorough in assessing your financial situation.
You can also get help from a certified accountant or financial advisor. Even experienced St. Louis divorce lawyers can help you get a better understanding of your financial situation. Make sure to list all of your jointly-held finances, including bank accounts, credit cards, mortgages, loans, insurances, investments, shares and stocks, property, vehicles, and jewelry, among other things.
You also need to create a list of property and investments in your name. The law requires you and your soon-to-be-ex to furnish all your financial details. So, you will need to provide yours as soon as possible.
Also, your St. Louis divorce lawyers will perform thorough research to know about the financial situation of the other party. Similarly, the other party will also look into your finances. So, don’t hide anything from your lawyers.
2. Close All Your Joint Credit Cards
Credit card debt can be a grave issue when getting divorced. If you have joint credit cards, you need to close them immediately. Remember, both you and your ex are responsible for all jointly-held credit card accounts.
So, if your spouse builds up debt on any of the joint credit cards, the bank can hold you liable. If you fail to clear the debt created by your spouse, it’ll affect your credit score. As it takes months and even years to fix a bad credit score, you can face the consequences of this bad debt for a long time.
If you have enough money, you can pay off joint credit cards fully and close them immediately. The other option is to split the debt 50-50 if your spouse agrees. You can open new individual credit card accounts after clearing the joint credit card debt. If the situation seems more complicated, you can talk to competent St. Louis divorce lawyers to find the right solution.
3. Open Individual Bank Accounts
Along with your joint credit cards, you also need to close your joint bank accounts. As St. Louis divorce lawyers, we have seen cases where hostile spouses have emptied joint bank accounts to aggravate their soon-to-be exes.
If your spouse exhausts your joint bank accounts, you will have little or no money left to complete the divorce and get child custody. You don’t need to deal with the additional stress caused by this financial chaos.
If your legal separation is amicable, you can talk to your spouse and split the remaining balance in your joint bank account. You can always open a new bank account in your name and put all your money in it until the divorce is over.
You will also want to remove the name of your soon-to-be-ex from all your investments like insurance, bonds, properties, and shares. Talk to licensed financial advisors or St. Louis divorce lawyers to create a plan to move as much money into your private account as possible.
4. Consider Tax Implications
Regardless of your marital status, you have to pay taxes on time. Uncle Sam isn’t going to wait until your divorce goes through, and you have the time and money to pay your taxes. What most people don’t know is that dividing your assets can have significant tax implications.
There are other tax implications as well. For example, as the marital status for filing purposes is confirmed on the last day of the year, you may not be able to file joint tax returns during the divorce. Also, child support or alimony is not taxable for the person receiving it or tax-deductible for the person paying it.
You should consult a certified accountant to understand your tax implications. Your St. Louis divorce lawyers can also suggest a financial advisor specializing in this area. Talk to your attorney as soon as possible.
Divorce is hard enough as it is. But you can’t ignore your financial security as it is a critical part of the divorce process that also safeguards your future, especially as a single parent. To secure your and your children’s future, you have to ensure your finances are in order during and after the divorce. If you are contemplating a divorce, you can use these four tips to secure your finances.
Call St. Louis Divorce Lawyers to Secure Your Finances during Divorce
The team of St. Louis divorce lawyers working at J Rench Law Firm, LLC, has an excellent track record of helping clients get desired results. Whether it is a divorce or a child custody dispute, we can provide you with reliable legal counsel. You can call (314) 725-4000 or contact us online to schedule your free consultation today.