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How can I safeguard my finances during a divorce?

On Behalf of | Jan 6, 2021 | Divorce |

Most divorces are emotionally trying, even if you know it is the right thing to do for you and your family. Divorces can also have a financial impact, which can be just as devastating.

Protecting your finances during the process ensures you can start a new life on solid ground. U.S. News & World Report offers the following tips on how to manage financial issues related to the end of your marriage.

Open a separate bank account

As soon as the new checking or savings account is established, divert direct deposits and other personal payments to it. You may also consider taking out half of whatever is kept in a joint account to prevent your spouse from withdrawing all the money. If you do deduct money, be sure to inform your spouse of what you are doing.

Do not hide assets

Hiding your assets might seem like a smart way to preserve your finances. It may also be satisfying if your divorce is particularly contentious. However, it can also get you in trouble legally, depending on the strategy you use. You will also face the ire of the judge, who will be less likely to rule in your favor if there are allegations of wrongdoing at play.

Change beneficiaries on life insurance policies

Beneficiary designations on individual life insurance policies override information contained in estate planning documents. That means if your ex-spouse is listed as the beneficiary, they will receive the proceeds regardless of what you wish to do with your estate. Change the designation as soon as possible to ensure your assets go to the right heirs after you are gone.

Be careful when requesting child support

It is expensive to raise a child, and often there are a lot of little fees that are neglected when developing child support orders. Make sure things like fees for extracurricular activities, medical costs, and even future college tuition are all accounted for. While you can always go back and renegotiate, it is best to develop a solid plan the first time.