Divorce is an emotional and financial turning point. While the end of a marriage is never easy, you need to make sure your financial stability should be a top priority. 

Unfortunately, divorce can impact your long-term financial health. Sometimes, it can take years to recover from mistakes. Here are proactive steps to help safeguard your financial future during a divorce. 

Get a Clear Picture of Your Finances  

Divorce is a financial reset. If you have never handled money in your marriage, you need to get familiar with your finances. Fortunately, taking control is not as hard as you might imagine. First, you need to gather all important documents, such as

• Bank statements, including checking, savings, and investment accounts
• Retirement accounts, such as 401(k), IRA, and pensions
• Mortgage and property records  
• Tax returns for the last 3 to 5 years  
• Credit card statements and outstanding debts  

This is your first step in taking control. You need to know exactly what you are working with so you can make a plan for the future.

Separate Your Finances  

If you and your spouse have joint accounts, shared credit cards, or loans, you must start separating them. You will want to open new accounts in your name.

For those with a direct deposit in a joint account, switch that to your personal account. This can help to build your independent financial identity.  

Many people worry about the other spouse running up a credit card account. You may want to freeze any joint accounts. This can help prevent paying for unexpected expenses. 

Checking your report may be a good idea if you are worried about your credit. You can make sure your ex-partner is not opening new accounts in your name.  

Determine the Status of the House  

For many couples, their biggest financial asset is their home. You need to figure out who gets it or whether it needs to be sold.

While you may want to keep the home, sometimes those payments would be difficult to pay on your own. You need to look at your financial picture to see if you can realistically afford payments. In some scenarios, selling is the better option. With that, both spouses will split the profits.

However, if you keep the home, there are always negotiations. Many times, one spouse keeps the house in exchange for giving up other assets like retirement savings. 

If you are no longer the owner of the home, make sure your name is removed from any mortgage paperwork. You do not want to be responsible for any financial commitments if you don’t own the house.

Plan for Spousal Support and Child Support  

California courts may award spousal support (alimony) if spouses have an income gap. The length of support depends on how long you were married.  

If you have kids, child support will be based on California’s statewide formula. This factors both parents’ incomes and how much time each spends with the children. Make sure you budget for these payments, whether receiving or paying.  

Update Your Legal and Financial Documents  

Once the divorce is final, you will want to update a few documents, such as:  

• Beneficiaries on life insurance and retirement accounts 
• Your will and estate plan  
• Medical power of attorney
• Titles and deeds for property  

With that, you can protect your money and make sure your assets go to the people you actually want.  

Rebuilding Your Financial Future  

Divorce is financially draining, but you can also see it as a fresh start. This is your chance to take control of your next chapter.  

You need to create a post-divorce budget. Take time to list all your income and expenses. With that, you know what you can realistically spend or save.

Along with that, start an emergency fund. Divorce can be unpredictable. You will want to save at least 3 to 6 months of expenses.  

For many people, a divorce can cause havoc on a credit score. If it took a hit, you need to focus on paying down debt and making on-time payments.  

Take this time to create new financial goals. Whether buying a home, traveling, or investing, give yourself something to work toward.  

Protect Your Financial Future 

A divorce can put your life into an upheaval. But by taking the right steps, you can safeguard your financial future. One of the first steps is working with an experienced California divorce lawyer. They can help you find the best options to protect all of your interests. 

If you’re going through this difficult time, reach out to Roberts & Zatlin Law Office. Our team can help get you answers to protect your financial future. To schedule a consultation and receive a free initial assessment of your case, please call (951) 381-8147 today.