When couples in California divorce, the personal finances of each spouse are often thrown into turmoil. Asset division and commitments to spousal or child support are typical aspects of the divorce settlement process. However, it is also essential for each spouse to take responsibility for their financial health during the separation process.
Divorce involves the untangling of every aspect of a couple’s shared life together. This includes their financial lives. Even in an amicable divorce, it is important for each partner to protect themselves during the process and reestablish their finances independently.
The first thing a divorcing spouse should do is to begin monitoring credit reports. Doing this protects against the possibility that the other spouse may take out loans or open credit accounts using joint financial information. Checking credit reports could also alert a spouse to unknown debts or credit lines.
The second thing to do is for each spouse to open a bank account in their own name if they both don’t already have one. The spouses should also work together to close any joint bank and credit card accounts. If a spouse proves uncooperative, seeking legal advice may be a good idea.
Spouses should also visit the human resources department at their respective workplaces and begin the process of changing beneficiaries on retirement accounts and insurance policies. Similarly, spouses should take steps to change their wills and other estate plan documents, including advance directives, living wills and powers of attorney.
Individuals going through a divorce may benefit from speaking with a family lawyer. This is particularly true in a high-asset divorce where there may be multiple accounts, debts and assets that will need to be analyzed and divided.