Misunderstandings about finances can be costly during a divorce

Many spouses are in for unpleasant surprises when it comes to the dividing up of assets at the time of a divorce. Preparations do need to be made to make certain the asset division process is performed with some predictability. 

Lack of knowledge concerning personal finances could lead to severe consequences in the event that one’s marriage end up in a divorce.  There are many steps that will need to be immediately taken such as the closing of all joint accounts.  Individuals will wish to monitor their credit scores and make certain that the other spouse does not have the opportunity to run up debts that may be charged to one's own accounts.

 

 

When it comes to the property division process, it is also important to know about all the separate accounts the other spouse has created. In some cases this information can be discovered through the examination of accounting records or past tax filings. Also, changes will likely need to be made at some point concerning estate planning documents and life insurance policies to make certain that beneficiary names properly reflect where one wishes one's assets to be distributed.

We want the property division process in a divorce to be fair. For example, in Texas there is a difference between community property acquired during a marriage and separate property. One should not assume that a name on a title or document turns something into separate property and therefore cannot be touched by the other spouse. Mistakes concerning identification of the type of property need to be avoided.

There are many additional issues that can arise when speaking about complex property division. Taxes, business concerns, retirement funds and distribution of valuable assets will need to be addressed. The help of an attorney when going through the division process can be vital.

Source: Credit.com, "How to Protect Your Finances in a Divorce," AJ Smith, March 31, 2014

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