How to protect your finances in a divorce

On Behalf of | Nov 3, 2016 | Divorce

Practically no one goes into a marriage anticipating that it will end in divorce. Therefore, most people do not give much thought as to how their financial situation would change if they were to split from their spouse in New Jersey. However, if they do end up finding themselves in the situation where a split is happening, knowing their options and how to protect themselves financially can go a long way.

Regardless of whether a couple was wealthy or less well off, chances are money will be a contentious issue. This can particularly true if one person was the breadwinner or one spouse was very controlling, according to CNBC. Therefore, it would wise for anyone going through a divorce to open their own bank accounts and credit cards separate from their spouse. If possible, any joint accounts should be closed and records should be kept of any shared balances.

In addition, Bankrate recommends checking one’s credit report to make sure that there are not any outstanding debts that he or she may not be aware of. Special attention should be paid to retirement accounts, as pensions and 401(k) accounts are often included in property division negotiations.

Many people may find the cost of paying for the divorce expense and will therefore be tempted to use retirement monies to fund their legal bills. This is often a mistake as there are usually penalties involved in withdrawing such funds. Finally, it may be helpful to consult a financial professional who is well-versed in divorce and can advise how best to protect and manage one’s money.