8 ways to protect yourself financially in a divorce

Divorce is messy business. Not only does it take a toll on you emotionally, but it can also cause you some serious trouble financially.

Believe me, I get it!

For me, divorce was quite liberating, but I won’t lie and say it wasn’t also overwhelming. Life changes in more ways than you even realize, and unfortunately, these changes can cause you to overlook some very important steps when it comes to protecting yourself.

Regardless of how amicable you want to be in this process, you never know how the other person is going to respond to the situation. I didn’t recognize my ex-husband, which meant I had to get over my feelings pretty quickly in order to make sure I was covering all of my bases when it came to protecting myself. My best interest was not his priority, but I made damn sure that it was mine.

Money is already complicated enough, and when you add in the emotional effects of divorce, it can make people crazy. And this is why it is so crucial that you take steps to protect yourself before you could ever possibly find yourself in this situation.

Life is unpredictable. No one gets married with the plan of getting divorced (or I think it’s safe to say that most people don’t). So rather than finding yourself overwhelmed with emotion AND having to scramble details of financial matters, go ahead and take the following steps to make sure you are protected!

Quick note: These tips apply not just to divorce, but to any potential riff in any type of relationship.

8 steps to protect yourself financially in a divorce

1. Keep track of all financial accounts

If you don’t already keep track of all of your financial accounts, it’s time to start paying attention. It’s very easy for things to disappear in the divorce process, and if you aren’t on top of it, you might have no clue that what used to be in one account isn’t there anymore.

Make sure you know what and how many accounts you both have, including those with only your spouse’s name on them. Maintain a good idea of how much is in those accounts, and if something does happen, you’ll know where all of the money is and how much should be there.

2. Make sure your name is on joint accounts

I made a big mistake. I transferred a lot of money to my then-husband for a down payment on a house, and what I didn’t realize was that my name was not on the account. So when the divorce rolled around, he held that money hostage until the process was final. I couldn’t touch a penny of it.

The good news is that I had access to the account and knew exactly how much was in there. So when he tried to transfer money around, I caught it.

3. Have your own separate accounts

Joint accounts are fine for certain things, mostly the things that you pay for together. So you both contribute money to the account to cover rent/mortgage, bills, household expenses etc. At the same time, you need to have an account with only your name on it. This is where you should put any bonuses, inheritances and any other money that you can spend without needing to discuss it first with your spouse. He or she may know you have this account and even how much is in it, but without being an account owner, he or she can’t access the funds without your approval.

4. Keep your business in your name

I started my own company not too long before my divorce happened. Thankfully, when he started trying to pull funny business, he couldn’t touch my company because it was only in my name. The idea here is to make sure you always protect what is yours and the success you’ve worked hard to create.

I have a friend whose ex tried to go after her company, claiming he paid for some of the expenses (when he did not). She started the company while they were married, which in some states would make it a marital asset. But since my friend could prove that she kept the family finances separate from any and all business expenses, her ex wasn’t able to get his hands on everything she had worked so hard to build.

A few ways to protect your business in a divorce:

  • Keep all financial finances separate from the company

  • Sign a prenup if the business existed before you get married

  • Sign a postnup (essentially a prenup that’s signed after the wedding)

  • Fire your spouse to reduce any claim he/she may have on the company

  • Pay yourself a good salary and keep a good portion in an account with only your name on it

5. Close joint credit card accounts

If you’re tied to an account with a spouse who has bad spending habits, you will inherit the mess they make. You can avoid this by closing those accounts and keeping your credit cards separate.

6. Make sure joint investment accounts require two signatures to make a withdrawal

This will help you avoid a situation in which your spouse cleans out an account without you knowing about it.

7. Make sure you have access to joint accounts and protect your own

Even if you’re happily married, it’s still a good idea to have access to the accounts so you can keep track of what all is in there. If you’re headed for divorce, make sure that you change the passwords to your accounts that you don’t want your spouse to have access to.

8. Protect your mail

Your soon-to-be ex doesn’t need to see your mail. If you’re headed for divorce, set up a PO box and have your mail delivered there. That way you can keep your ex out of your business.