For Divorcing Women: My Five Best Financial Tips For The End Of The Year
It’s already December, and I know it’s easy to get “wrapped up” in all the hustle-and-bustle of the holiday season. However, if you are planning to divorce in the New Year, this is also a time when you can take a few important steps that will make the process much, much easier in the months ahead.
So take my advice: Use the next few weeks to make a divorce financial list –and then, check it twice! To help get you started, here are my five best financial tips for the end of the year:
1. Gather financial documents.
Everyone enjoys opening the mailbox to find those once-a-year holiday greetings from far-away relatives and friends. But also be on the lookout for year-end statements from banks, brokerages, credit card companies and the like. After they arrive, be sure to make copies, and use my Financial Information Checklist to learn about what other financial and legal documents you should gather and copy as well. Secure the copies with a trusted friend or family member, or use a safe deposit box that your husband can’t access.
Having important documents on hand early in the divorce process means you avoid the time and expense (not to mention any possible unpleasantness) associated with trying to get copies of them later.
2. Assess your credit.
Good credit is the foundation of your financial future. Without it, you’ll have trouble obtaining loans for any purpose, and you might even run into roadblocks managing the expenses of running your household.
This December, request a copy of your credit report, and start correcting any misinformation it contains. While you’re at it, keep an especially close eye on credit card statements. Is your husband using your joint credit card to buy his girlfriend holiday gifts? If so, you’ll want to document that –and any other unusual activity, as well.
For more tips on credit, check out my post on How To Protect Your Credit Score During Your Divorce.
3. Open accounts in your own name.
When your divorce is finalized in the New Year, you’ll be a single woman, and you will need your own bank accounts and credit cards. It’s not too soon to set these up. Remember to use a different bank than where you currently have joint accounts, and open both savings and checking accounts in your name alone.
As I mentioned above, establishing good credit is essential, so make sure you can obtain credit cards in your own name. Recently, the Consumer Financial Protection Bureau (CFPB) updated existing regulations to make it easier for spouses or partners who do not work outside of the home to qualify for credit cards, but that doesn’t mean approval will be a slam-dunk, particularly if you are currently a stay-at-home spouse. Give yourself plenty of time to work through the application process.
4. Begin to assemble a professional divorce team.
There’s no benefit to sugarcoating it, so here’s the simple truth: Divorce has become quite complicated financially. Today, most couples have multi-faceted financial portfolios, and the regulations governing marital assets are very complex. Many women find they need multiple layers of professional help to navigate all the legal and financial details.
If you’ll be divorcing in the New Year, it’s a good idea to begin researching divorce professionals who can steer the process. I recommend you start with a matrimonial/family law attorney, a divorce financial planner and a therapist/counselor. Gather and compare information and schedule interviews with the best candidates for January. Then, you can relax a bit, knowing that your divorce will be in expert hands.
5. Be vigilant.
December is usually a time of good cheer, but don’t kid yourself: It’s very common for divorcing husbands to hide assets and/or income at any time of year. These dirty tricks run the gamut from stashing cash in safety deposit boxes, to underreporting income and overreporting expenses, to unloading property to family and friends with the understanding he’ll get it back after the divorce settlement is final. For more, see my article about specific signs that your husband might be hiding assets.
Do you have reason to suspect something is amiss financially? If so, you may want to seriously rethink filing a joint tax return. After all, in most cases, the IRS will likely find anyone who files jointly equally liable for any misdeeds, no matter how innocent or ignorant of them you are. (There is a very limited and hard-to-get I.R.S. and state exception called “Innocent Spouse Relief,” but it is rarely accepted. More details here.)
One last word of advice: If you are considering divorce in the New Year, please keep in mind that you are far from alone. There are more resources and professional help than ever to guide you through the process, and it’s important for you get the help you need to start your secure financial future as an independent, single woman. Resolve to Think Financially, Not Emotionally®, and you’ll be able to ring in the New Year with confidence.
Jeff is the author of the new book, Divorce: Think Financially, Not Emotionally – What Women Need To Know About Securing Their Financial Future Before, During, And After Divorce, which provides women going through the crisis of divorce with the tools they need to secure their financial future.
Jeff is also the founder of Bedrock Divorce Advisors, LLC, a divorce financial advisory firm that works exclusively with women throughout the United States on the financial aspects of their divorce and Think Financially, Not Emotionally® a private, password-protected membership site exclusively for women (Its mission is to educate, empower and help women throughout the United States before, during and after divorce).
Jeff writes a weekly blog for Forbes.com about the financial aspects of divorce for women called Divorce Dollars and Sense, and contributes articles regularly to The Huffington Post, More.com, Lawyers.com and many others. He has also been extensively interviewed about the financial aspects of divorce by CBS Television News and such prestigious publications as The Wall Street Journal, Dow Jones, Smart Money, Consumer Reports, The Christian Science Monitor and many others.