Getting separated is rarely an easy endeavor. It’s often complicated and, for many, causes significant emotional and financial challenges. If you’re planning on separating from your significant other, it’s important that you manage your finances wisely. The consequences could be long-term financial hardship.
Most people fail to properly protect their financial situation before filing for separation. However, those who are proactive take steps to safeguard their assets and credit – preventing potential hurdles down the road.
Below, we discuss key strategies for protecting your finances during a separation. Please reach out to our legal team directly with specific questions or if you require representation.
1. Assess Your Financial Situation
The first step you should take is to conduct a full assessment of your financial situation. This includes creating a list of both personal and joint assets, debts, and bank and retirement accounts.
Log in to your bank(s) and download recent statements for checking and savings, credit cards, and any active loans. Then, review your monthly income and expenses to better understand your household’s current cash flow.
Finally, plan for the future by creating a realistic budget that reflects your post-separate financial needs. Look for any financial gaps and for opportunities to reduce expenses.
2. Separate Joint Accounts
If you have a joint bank account, close or convert it. This prevents any unauthorized access, spending, or withdrawals. Your new individual accounts help you and your partner to manage each of your incomes and bills separately.
It’s a good idea to notify your financial institutions and creditors about the separation and to update the account holders and authorized users.
To avoid being held accountable for your partner’s future spending, be sure to review the balances and terms of credit cards and loans. Freeze these accounts by contacting the issuers or lenders to prevent any unwanted charges.
If possible, split these accounts so that both parties are responsible for their share. Transferring the debt to individual accounts is the best option, if both parties can come to an agreement.
3. Protect Your Credit
When getting separated, you definitely want to protect your credit. You can do this by setting up monitoring, regularly checking reports yourself, and reporting anything that you find out of place.
Tips to safeguard your credit score:
- Make sure all debts, including joint accounts, loans, and credit cards, are paid on time.
- Depending on your situation, you may want to freeze your credit to prevent new accounts from being opened.
- Close joint credit accounts and remove yourself from any shared debts where possible.
- Immediately dispute any inaccurate information or unauthorized credit accounts on your credit report.
4. Legal Support & Documentation
When separating and planning a divorce, it’s vital that you speak to a family law lawyer. A good attorney can help you better understand your options, making sure you don’t do anything illegal, when it comes to managing your finances.
Make a record of your financial documents, including large transactions, email, payments, and account changes, for when you consult with your legal representative. Additionally, bring any pertaining legal and financial documents, such as tax returns, loan agreements, and property deeds.
If you and your partner have verbal agreements, be sure to put them into writing and get the document notarized.
5 FAQs About Finances, Separation & Divorce
Below, we address several of the questions we frequently receive from clients planning to separate from their partners. If you don’t see your question answered, please contact us here.
#1 Can I Stash My Money Before Filing for Divorce in Arizona?
Most likely not. Stashing money without disclosing it is illegal and in violation of Arizona’s community property laws. The courts require full financial disclosure during a divorce, and if any assets are found to have been hidden or money stashed, you could face legal repercussions.
#2 Who Loses the Most in an Arizona Divorce Case?
Under our state’s community property laws, assets and debts are typically split equally between both parties. This can lead to financial loss for both parties; however, this could leave the spouse who earns less financially strained.
#3 How do I Financially Prepare to Leave My Husband/Wife?
To prepare to leave a partner, follow the steps outlined in this article. Start by assessing your finances and separating joint accounts. Collect and make copies of important documents, and be sure to consult a family law attorney.
#4 Can My Significant Other Cut Me Off Financially During Separation?
Legally speaking, no. Your spouse cannot remove your access to shared financial resources that are community property. In the event that your partner has attempted to cut you off, you can file for spousal maintenance/alimony or seek financial orders via the court to regain access.
#5 How do I Separate From My Spouse When I Can’t Afford It?
For those seeking a separation or divorce but are concerned about being able to afford it, you have options. Arizona law allows for temporary orders, such as alimony and child support, to be requested during the separation. The state also provides free or low-cost legal aid services to assist with filing for divorce or legal separation.
Schedule a Free Consultation with a Family Law & Divorce Lawyer in Flagstaff
The law team of Antol & Sherman offers extensive experience handling family law, separation, and divorce cases. Our lawyers understand local laws, including those related to property division, debt responsibility, and how support payments can impact your financial situation (in the immediate future and long-term).
To discuss your financial situation and separation plans with an experienced Flagstaff law firm, reach out today to schedule your complimentary consultation. At the very least, you’ll receive some free advice that you can use to better plan your personal financial future.