Ten steps to consider for a money-smart divorce
Emotional aspects of a divorce often pre-dominate divorcing couples' minds; however, the financial aspects should not be overlooked. A divorce will almost always place you in a less advantageous financial situation than you had during the marriage. Here are 10 steps you should consider taking to protect your finances so that you can recover your losses quickly and potentially avoid facing further emotional turmoil over your future finances:
1. Consult an attorney about securing a Financial Status Quo Court Order so that both parties abide by reasonable financial restrictions while the divorce is pending.
2. Consider pulling your credit report - review all accounts reported *
3. Open individual bank, credit card and brokerage accounts.
4. Close all joint accounts - if no court order prohibits such action.
5. Close joint credit cards - if no court order prohibits such action.
6. Keep separate property separate - don't commingle inheritance or separate accounts.
7. Change beneficiaries - if no court order prohibits such action.
8. Consider what actions need to be taken if the house must be sold.
9. Check your retirement - request current account/pension statements.
10. Guard your health coverage from being cancelled - apply for COBRA benefits within 60 days of divorce judgment entry and investigate post-divorce medical insurance options besides COBRA benefits (18 to 36 months of coverage after divorce depending on circumstances).
* Pull your credit report early in the divorce process so that anything in dispute can be resolved before the divorce is finalized. There are three major credit reporting agencies: Experian, TransUnion and Equifax. Be sure to get a copy of your report from each of them. The reports are the quickest and easiest way to get an overview of the outstanding loan balances, mortgages and credit card debt. Review all accounts and confirm your spouse has not opened accounts you don't know about. Use the reports to come up with a plan for division of debts and assets.