When a spouse knows that divorce is in his or her future, there are obvious steps to be taken. Securing a competent divorce attorney is one, and thinking about the division of assets and income is another. Yet when it comes to the financial details, clients often do not know what to do.
An uncertain financial future may scare the client, but the fear of the unknown makes it more important than ever to focus on protecting the client’s financial interests. The divorce attorney can provide this list of simple (but sometimes overlooked) tips to the client to help aggressively fight the financial case in divorce court:
- Secure funds for living expenses, attorneys, and other professionals. A spouse who does not control the family’s finances may find it difficult to get access to funding during the divorce. It is not uncommon for the moneyed spouse to cut off access to money to force a quick (and possibly unfair) divorce settlement. It is important for you to legally get access to and secure money that will only be available to him or her. Relying solely on family court to award funding for living expenses and divorce professionals is far too risky.
- Gather and secure as much financial documentation as possible. Any financial documents in the residence should be copied and put in a secure place outside the home. The documents should include income tax returns, bank and brokerage account statements, credit card statements, real estate closing statements, mortgage applications and contracts, documentsrelated to major purchases, wills and trusts, and anything else related to the family’s finances. If you have access to account documents online, access and print all of the statements and related items. These are valuable documents that you need access to during the divorce, and again, it is unwise to rely on family court and the discovery process to get the documents.
- Make lists of all known assets, liabilities, real estate holdings, and business interests. In order to ensure that everything is accounted for in the divorce, you should not rely on your memory going forward. Important facts can be forgotten easily. The sooner you make lists of these items (and add to them as details come to mind), the better the information that can be used to fight for your fair share. When hidden assets are suspected, lists like these can be one of the best starting points when searching for the assets.
- Open accounts in your name only. You should get new bank accounts and credit cards, preferably with banks or companies which do not maintain your joint accounts. It may be difficult to secure credit if you do not have a source of income or a separate credit history, but it is important to attempt to get credit. Once the divorce is final, you will need separate accounts anyway, so starting the process sooner can be beneficial.
- Monitor your credit regularly. Immediately access your credit report and determine if there are any accounts of which you were not aware. This could point to secret credit cards or other accounts that your spouse may have used to engage in secret activities such as affairs or business ventures. Credit reports should be accessed on a routine basis during the divorce process to ensure that all liabilities have been accounted for in the divorce.
- Get a secure mailing address. Secure a mailing address that your spouse is unable to access. This will be important so that account statements, correspondence from counsel, and other mail can be received without fear of interception by your spouse. A post office box may be the best option as it is both secure and private.
- Change beneficiaries and decision-makers. Your will and living will (or healthcare power of attorney) should be changed so that the soon-to-be ex-spouse does not have decision making capabilities. Beneficiaries for retirement accounts, life insurance policies, and other financial accounts should be changed. Although your spouse may still have a right to a portion of these assets before the divorce is final, you should still protect your assets as much as you can.
- Prepare yourself for a long fight and an outcome that might seem unfair. Divorce can be a lengthy process, and you must be prepared (both financially and emotionally) for a long fight. Don’t assume that you will get half of everything in a divorce. State laws vary, and you are not necessarily entitled to a 50/50 split in the divorce. However, if you have the financial wherewithal to resist a quick settlement, you may have a better chance at getting a fair division of the assets.
Tracy L. Coenen, CPA, CFF is a forensic accountant and fraud investigator with Sequence Inc. She specializes in cases of embezzlement, financial statement fraud, white collar crime, securities fraud, and family law. She can be reached at 312.498.3661 or [email protected]