Take steps to prepare for financial independence

On Behalf of | Jul 10, 2021 | Blog |

During the divorce process, people usually need to disentangle their finances. This can sometimes be a complicated process. There are several steps that people should take to prepare their finances for this new stage in their lives.

The first thing that people may want to do is review their financial records. According to Nerd Wallet, these records include statements from bank accounts, investment accounts and credit cards. Additionally, people should look over their tax returns and their retirement accounts. Performing this inventory can help people understand what kind of assets they have access to.

Know the date of separation

The date of separation is an important aspect of property division. Policy Genius says that this date may be the date when one spouse files for divorce or when people stop living together. Before the date of separation, the assets that people acquire are usually marital property. However, the assets that people accumulate after the date of separation may be separate property. Determining the date of separation can help spouses understand which assets they will need to divide and which ones may be exempt.

Establish financial independence

As people go through the divorce process, they may want to begin preparing for their life after the divorce. Many people may have credit cards and investment accounts that are in the names of both spouses. People may want to open their own accounts. Additionally, it may be a good idea to open a separate bank account.

People should usually wait to open their own accounts until they have established the date of separation. Additionally, they should not close their joint accounts until they finalize the divorce.

If people begin their preparations in advance, they can ensure that they are ready to be financially independent after the divorce.