By Shawn Leamon
Learn more about Shawn on NerdWallet’s Ask an Advisor
The process of getting a divorce often leaves both parties wounded. However, there are a few things you can do right now to ensure that you are financially protected.
1. Gather your financial records
The first thing you should do is to collect all of your financial records. Ideally, you will have five years’ worth of documents, including tax returns, payroll stubs, benefits information, bank statements, investment accounts and property information.
It would be wise to make copies of everything and keep them outside of the house — either in a private safe deposit box or at the home of a trusted friend or family member. Having evidence of all of your financials will help speed up discussions during the divorce, and it will safeguard you in case something goes missing.
2. Inventory your assets
While you are gathering your financial records, begin an inventory of all of your assets. Separate property usually includes anything you owned before the marriage, any gifts given solely to you, or inheritances. Anything acquired during the marriage is usually considered marital property.
Take digital, date-stamped photos of your valuables such as jewelry, antiques and collectibles. This may seem extreme now, but it is not uncommon for things to go missing once the process starts.
3. Monitor your credit report
In order to emerge from the divorce as fiscally unscathed as possible, you need to be fully aware of your current financial situation. To paint the clearest picture, obtain a copy of your credit report, paying close attention to any outstanding debts.
If there is anything that does not add up, you will want to ask your attorney for assistance before you ask your spouse for full disclosure of records. Additionally, it is wise to monitor your credit report throughout the divorce process to avoid any surprises later on.
4. Open individual accounts
As soon as you know a divorce is inevitable, open individual accounts for yourself. To ensure confidentiality, consider using a bank other than the one you and your spouse are currently using. Open a checking account, savings account and credit card in your name only. Use that credit card in ways that will build or strengthen your personal credit history.
5. Know (and cut) your expenses
It is no secret that divorces are costly. From the moment you sense that your marriage is heading in that direction, you need to redraw your budget and determine how you will accommodate not only the expenses associated with divorce, but also for your new, single life. In order to help build your savings, it is likely that you will have to adjust your lifestyle and cut out anything unnecessary.