Keeping The Financial ‘Piece’: Divorce Finances Tips
By Sarah J. Merry Cordell & Cordell Divorce Lawyer If you have recently decided to seek a divorce from your spouse, or are contemplating doing so, you undoubtedly have questions about what you should or should not do with respect to your assets, debts, and household expenses. You should always ask your family law attorney for advice on these matters, however, these general divorce finance tips should prove useful for any man who is just beginning the divorce process.
To the extent your local laws allow, it is a good idea to immediately stop contributing to your retirement account. The reason for this is two-fold. First, by discontinuing contribution to your retirement account you are stopping the accumulation of the amount in the account that will be considered “marital” and subject to distribution between you and your spouse. Second, continuing to contribute to the account only muddies the water: post-separation contributions make it difficult to determine what amount in the account is attributable to the growth on any post-commencement contributions, which are generally considered the account holder’s separate property.
Life Insurance Policies
It is a good idea to maintain any current life insurance policies, especially if there are children of the marriage. If there are children involved and you cancel a life insurance policy that lists your spouse as the beneficiary because you think it is the wise thing to do, you will look spiteful in the eyes of the court and the court will be left with a false impression that you are putting yourself before your children. This is never a good look for a man going through divorce.
So long as you are financially able, and until such a time as there is a court order or agreement stating otherwise, continue to pay all household bills as you have in the past. If you have traditionally paid the mortgage and your spouse has traditionally paid the remainder of the household bills, then continue to pay the mortgage. If you have a joint bank account you and your spouse have traditionally used to pay such bills, continue to contribute to and make payments from that account as you have in the past. In many states, the courts look favorably upon a party who has continued to maintain the “status quo” and do not appreciate a party taking actions to frustrate this.
Do Not Hide Assets
Parties who go through the process of divorce usually engage in the discovery process where each party provides the other with numerous account statements and documents. If you try to hide assets, you are bound to get caught, and depending on your state’s laws, you may be punished for this by the court. Trying to hide assets is also likely to drive your legal costs up, so save yourself the trouble and remain honest. Finally, be aware of the fact that you will probably go through the discovery process. Your spouse will be entitled to see all of your bank account statements and other account documents for the past several years even if your account is separate. Be wise with your money and keep in mind that every purchase you have made for the past several years may be subject to scrutiny.
These tips are to provide you with a basic outline of the financial issues that you may face in the beginning stages of divorce, but you should always discuss these issues with your divorce attorney. Remember, “When in doubt, ask!”