Divorce can bring out the worst in many people. The sweetest, most thoughtful and caring person you thought you married has turned into a monster, ready to rip you apart and turn you into an emotional and financial mess. While there is no shield against the psychological trauma of a marital split, a good protection for your financial assets would be to have a prenup. The prenuptial agreement has transformed from being an unromantic piece of paper to a necessary contract to protect both parties from being divested of all their money and possessions, whether these were acquired before or after saying their “I do’s.”
That being said, most average couples do away with premarital agreements for various reasons, then regret not having one when the relationship turns sour and a divorce is likely. Without meaning to sound like a doomsayer, it’s best to prepare yourself and avoid these money-related activities before and during the court proceedings.
- Cancel all joint credit cards and other joint credit lines that your spouse has access to. You will partly be responsible for paying all money spent using joint accounts, even if you didn’t know about it or didn’t use the credit cards. To do this, meet with your spouse and tell them you are cancelling, then do it immediately. It only takes a few minutes to cancel but in those few minutes, your spouse can make purchases and rack upConcomitant to that, be scrupulous in monitoring your bills and debts and notify creditors that your joint accounts have been cancelled.
- During your marriage, don’t change ownership of real estate you owned before getting married. If you add your spouse’s name to the deed, even if you later evoke it, the court may decide in favor of your spouse and award half the value of the property to him/her. Additionally, do not use joint funds for paying the mortgage or tax on this property or making improvements on it. This can be tricky, and Pasadena divorce lawyer Ted Khalaf advises keeping all financial records that will prove the owner’s claim that money spent on the real estate came from personal, not joint, funds.
- Put a substantial amount of your money or property in another person’s name. Your mother is probably the best person you can trust not to take advantage of you. While this may seem deceitful, it’s also an almost fool-proof way of keeping the funds from going to your ex. The drawback here is, it belongs legally to your mom, and if she dies and you have siblings…
- Take very good care of your finances the moment divorce proceedings begin. Avoid unnecessary expenses charged to your credit card. You don’t know what the court will decide, the amount of child support you’ll pay, what property will be taken from you, etc. And don’t let your anger and quest for revenge get the better of you by incurring debts in your spouse’s name, cash joint cheques or sell things that belong to him or her.
- Take a proper inventory of everything you own together. Make a video recording of all the contents in your house, with the date function on and together with your partner if possible. Record all assets such as jewelry, artwork, silverware, expensive home decors. Open drawers and record the contents. Include financial documents, wills and trusts. Put the documents and recording in a safe place and make an extra copy to store in another place.
- Talk to an accountant for advice on tax changes.
7. Be honest in your disclosures with your lawyer so he will not be caught by surprise if something turns up that he should have known about. His defense will rely in large part on the information you give him.