As many divorcing couples can attest, things can get heated when the topic of dividing money comes up. If you have not protected yourself financially with a properly drafted premarital agreement (prenup) or post-marital agreement, you might be in for a longer struggle. Of course, it all depends on how you and your soon-to-be-ex decide to approach the dissolution of the marriage.
If you are considering filing for divorce in California, or have recently filed, read on for 6 tips to protect yourself financially during your divorce.
1. Copy Your Records
Before filing for divorce, make copies of all of your financial records and keep them in a secure place away from your spouse. These records can include personal and business income tax returns (last three years), business records, account statements from investment firms, banks, and pension offices, pay stubs, life insurance information, annuities, credit card statements, stock certificates, and receipts for purchase of larger items. An experienced family lawyer in Los Angeles will let you know if other documents apply in your situation.
2. Get Copies of Credit Applications
Obtain copies of any credit or mortgage applications from your bank or creditors, particularly those that have been completed 12 months prior to your separation. Individuals applying for loans or credit tend to list all possible assets and income in order to qualify for the credit. Therefore, this may be a very good source of asset discovery if down the road, one spouse believes that the other is hiding community property.
3. Identity Check
Check data reporting services, such as credit agencies, to ensure that your name, address, and other personal information are correct. Find out what information about you is online through a quick Google search.
4. Marital Debt
Creditors are not party to your separation or property settlement agreement but debt that was obtained in the name of both spouses before a divorce remain the obligations of both parties after a divorce. This could mean that if your ex-spouse does not pay a debt that he or she was responsible for according to your divorce decree, you are on the hook.
5. Understand Your Social Security Benefits
Generally speaking, if you are married 10 years or more, you are entitled to half of your spouse’s social security benefit or 100% of your accrued benefit, whichever is greater.
6. The 3 Ds of Alimony Deductibility
If you want a tax deduction for the alimony you pay (it will be taxed to your ex), it must be (1) paid in dollars, (2) under a decree or written agreement, and (3) cease on your ex’s death. Post-divorce you cannot live with your ex and the payments can’t be designated as non-taxable or child support.
For more information on divorce and your finances, contact the family lawyers at Walzer Melcher, LLP today.