How To Handle Your Money During A Divorce
We all know that divorces are stressful, but they can become more stressful if finances are not handled correctly during the process. Therefore, I’m here to give you a couple of tips to help you to reduce that financial stress.
Do Not Hide Assets
The number one tip that I would give you to begin with is don’t hide any assets. I have clients who tried to do this in the event of a divorce, or during their divorce, in the hopes that these assets would not be known to the other spouse, and that they would not be divided. Ultimately, most of the time these assets are discovered and the judge will order that they be divided later. So, don’t hide the assets.
Do Not Rack Up Credit Card Debt
Don’t make large purchases on credit cards. Through the division of assets, you will either have to divide that debt or may be solely responsible for the entire debt that was incurred if it was found to have been frivolous spending on your part. It may even be ruled by the judge as Marital Waste. Read more about Martial Waste.
Spend As Necessary
Buy the necessities and pay your bills. Using credit cards or taking money from a joint bank account for necessities such as food, shelter, or clothing, is considered an allowable expense and you may use credit cards for these if you have no other means of paying them.
Do Not Make Large Purchases
Don’t buy expensive items such as homes or vehicles during this time because you will be responsible for these. The court will see this spending as you taking money from the estate.
Don’t Cash Out Any Stocks or Retirement Accounts
These are considered community property and, again, and you will be responsible to pay the estate back and also be responsible to pay any tax consequences that might be incurred because of taking money out early.
Don’t Close Existing Bank Accounts or Open New Ones
Remember this is a community property state and any money that is either in a joint account or that you transfer to a new account in your name only is considered community property and will be divided between the two of you by the judge.
Basically, you want to continue with your status quo during your divorce, don’t do anything different other than paying for necessities with a credit card if you have to during the divorce. Once the divorce has been finalized, you will be free to control your separate finances any way that you choose.
If you would like to discuss your specific situation with an experienced Family Law attorney, do not hesitate to contact our office to schedule a consultation. Our office can be reached at (702) 998-1188, info@ljlawlv.com, or by scheduling a consultation online.
For more resources on divorce and other family law topics, be sure to check out our Family Law FAQ, podcast, and Family Law TV playlist on Youtube.