8 Money Tips for Divorce

When couples are headed for divorce, they are not always thinking with a clear head. Regardless of the reason for the divorce, most spouses experience a deep sense of loss. Even if you are emotionally ready to “move on” and relieved that it’s finally over, you still have the financial end of the marriage to address and that alone can be daunting.

As someone getting a divorce, our advice is to do your due diligence. If you do your research before you tell your spouse, even better. The more you understand about your rights to your children (if any) and your assets under California’s divorce laws, the more confidence you will have through the divorce process.

Often, stress comes from fear of the unknown, therefore, educating yourself about divorce will help alleviate any fears or uncertainties that you may have. To begin your divorce journey on the right foot, follow these tips:

1. Get familiar with your finances.

Write a detailed list of every single financial obligation that you and your spouse have. Include insurance, housing, utilities, childcare, credit cards, etc. You need to know exactly what you pay each month, the total balances, and which accounts are joint (in both of your names).

2. Copy your financial records.

Before you meet an attorney, make copies of all of your financial records and keep them tucked away someplace safe, away from your spouse. Such records include tax returns (last 3 years), credit card statements, life insurance policies, mortgage loan documents, stock certificates, etc. It can be difficult to obtain these copies once the divorce has been filed.

3. Run your credit.

Run your credit report so you know exactly which accounts are opened and which accounts are jointly titled in both of your names. You need this information so you know where your credit stands.

4. Get a P.O. Box.

Spouses have a way of opening each other’s mail during a divorce. If you don’t want your spouse to open or possibly hide your mail, we suggest forwarding YOUR mail to a P.O. Box.

5. Learn about California’s community property laws.

California is a community property state, which means that most marital assets acquired during the marriage are subject to a 50/50 split, regardless of who earned the money or whose name is on the account. Learn your rights under these laws.

6. Pay off and close joint accounts.

If you can afford to, it is wise to pay off and close any joint credit card accounts. If your spouse agrees to pay a debt and they miss a payment, you’re on the hook for that money regardless of what the divorce decree says.

7. Understand the tax consequences of spousal support.

In California spousal support is deductible for the paying spouse and taxable for the receiving spouse. However, child support is not a write-off.

8. Update your beneficiary designations.

After your divorce is final, be sure to update your beneficiary designations on retirement accounts, bank accounts and life insurance policies. If you name a minor child, assign a custodian that you know and trust.

For more financial tips during divorce, contact a Los Angeles divorce attorney from Claery & Hammond, LLP.