"Pour yourself a drink, put on some lipstick, and pull yourself together."
- Elizabeth Taylor
1. Open New Bank and Credit Card Accounts in Your Name Only
This is the most important thing you can do before you initiate a divorce or as soon as your spouse asks for a split. You risk being closed off from money in the short term if all your liquid assets are in joint accounts. Your spouse could clear out your checking and savings accounts without your consent or freeze your credit cards. If you have your own funded accounts with enough money for at least 6 months, then you can weather any short-term storms without worrying how to cover expenses. You should also check your credit score and make sure everything looks accurate.
2. Know the Online Passwords of All Accounts and Make Copies of Financial Records
You can’t keep an eye on your joint accounts and make changes if you can’t access them. Make sure you know how to get to them online. Make copies of any hard-copy records you have of insurance policies, wills, trusts, tax returns or other legal documents. At some point in your divorce you will need to complete a financial declaration that asks for proof of taxes, debts, assets and monthly financial obligations. Don’t risk your spouse hiding or disposing of these documents before you can make a copy.
3. Take Pictures of Everything in the House
There’s a good chance that one of you will move out of the marital residence as you go through divorce proceedings. If you’re the one to leave, you may no longer have access to the property and no way to prove that the things important to you existed. As early in the process as possible take pictures of anything valuable. Even if it is something you may not want to fight for in the split, document it as something to negotiate against.
4. Protect Yourself from Your Spouse’s Debt
Debt is divided post-separation by who incurred the debt. Translation: if the debt is in one person’s name it’s theirs, if it’s under a joint loan or credit card then the responsibility is shared. There’s not much you can do about joint debt, but if you have a shared credit card you can freeze additional spending. You don’t want your partner running up charges in anticipation of a split. If you do see this happening then it could be a red flag that something is about to go down. Keep monitoring your card activity and your credit score.
5. Build a Cash Reserve
This may sound basic, but build a 6-month cash reserve. I’ve had many clients who have built up a reserve slowly by taking out an extra $20 at every grocery store purchase. This cash will help you establish a new residence, pay legal fees and living expenses and cover kids’ expenses until spousal support is established legally. Start by understanding in detail what your monthly spending entails for both you and your children to determine how much you will need.
6. Don't Make Any Financial or Legal Decisions Based on Guilt, Pride or Shame.
Take a breath before you sign any legal documents. Get a second and third opinion. Don’t just give in because you’re tired and frustrated. It feels like the right thing to do now, but a few years down the road you’ll regret it. Trust me. The human brain is programmed to prioritize current rewards (lack of conflict) over future rewards (a fair settlement). Try to override this instinct and focus on what will be best for you and your family 5 or 10 years from now.