Going through divorce is a difficult experience emotionally for both spouses.
Additionally, there can be significant financial burdens for those couples who are navigating through divorce proceedings. Fortunately, taking a few proactive measures can help you limit the financial headaches that divorce can cause.
1. Check your joint accounts
During your marriage, you and your spouse likely opened joint credit cards together. Now that you are divorcing, it is time to begin separating your finances from your spouse’s.
The first thing you should do is to begin to close or freeze any joint credit accounts you have together. If you both share an account, you may be responsible for any irresponsible spending or debt that your partner incurs. It is also a good idea to remove your spouse as an authorized user on any of your personal accounts.
If you are worried about your spouse opening up additional lines of credit, you can request a free credit report from the three major reporting agencies every 12 months.
2. Document your assets
Outside of your children, money is perhaps the subject that causes the most conflict during divorce proceedings. Take an inventory of all assets you own–both marital and your own personal holdings–as well as any debts and bills owed by you and your spouse.
Having a complete inventory of your financial assets will help increase the chances you have adequate assets once the divorce is finalized.
3. Update your estate plan
Few people like thinking about their estate plan, but to update it after major life events, including a divorce. Review your will, trusts and other important legal documents to determine whether there you need to make any revisions.
It is also important to review the beneficiary designations on your retirement accounts and life insurance policies. If your spouse is the listed beneficiary, they will receive the assets in the event you die, regardless of what you wrote in your will.
Navigating the divorce process in Alabama can be a complex process. With some planning and foresight, you can better position yourself to successfully transition into your new life.