How to Financially Protect Yourself During a Utah Divorce
Marriage isn’t just an emotional relationship — it’s an economic one, too. When you choose to part ways with your spouse, it can have a major financial impact on your life. However, there are a variety of ways you can safeguard your assets in a divorce. From ensuring your marital property is separated from your non-marital property, to creating a budget that will help you transition into your new life, here are several ways you can protect yourself financially in divorce:
Separate Your Marital and Non-Marital Assets
Utah is an equitable distribution state. This means that marital property is divided in a way that is deemed fair, not necessarily equal. Non-marital property, also referred to as separate property, belongs to the original owner. One of the best ways to get organized — and protect yourself in divorce — is to make a list of your assets and debts, and note when they were acquired.
Property that is typically not subject to division in divorce can include the following:
- An inheritance obtained by either spouse
- Any property acquired by either spouse before the marriage
- Assets defined as separate property in a prenup
- Gifts given to one spouse, versus the couple
It’s not uncommon for assets to be commingled, especially in a long-term marriage. Once divorce is anticipated, you should be mindful to keep your separate property apart from your spouse’s and the marital assets you have acquired.
Gather Copies of Your Financial Documents
Gathering copies of your financial documents can be a time-consuming process. Start collecting this paperwork as soon as possible. Importantly, your divorce attorney will need to review the documents related to your checking and savings accounts, investments, mortgages, credit cards, and other records to understand the financial story of your marriage. In addition to being critical for the purposes of achieving a fair divorce settlement, these documents are also vital when it comes to creating a post-divorce financial strategy.
Start Building Your Credit
Divorce can have a significant impact on your credit. One of the ways you can protect yourself financially in a divorce is to start building your credit back up. Your credit score can factor into many aspects of your life — including if you want to rent an apartment, purchase a new car, or apply for a loan. Notably, it isn’t unusual for a spouse to discover their credit score has dropped because the other failed to make a payment on a joint account. It’s a good idea to check your credit score regularly for mistakes, delinquencies, or errors.
Create a New Budget
Your financial situation can change considerably after divorce since you will only have one income to rely on, rather than two. When you are going through the process of parting ways with your spouse, it’s essential to prepare for the economic effects it will have on your life. You may need to figure out how you will pay your expenses with a reduced income, handle various debts, and reduce your spending. You can take control by creating a budget that will reflect your new financial situation.
To create a post-divorce budget, look at your income and expenses. Make a list of your necessities and wants. Consider where you might be able to trim your expenses — and avoid incurring any new debts. Check in on your budget regularly and track your spending. You should also set up an emergency fund to help improve your financial stability.
Open Your Own Bank Accounts
Many couples choose to establish joint bank accounts upon marriage. However, as soon as you realize divorce is imminent, you should open your own checking and savings accounts solely in your name. This will help to separate your spending patterns from those of your spouse’s and protect your financial assets in divorce. By having your own bank accounts, you can maintain control over your finances, track your spending, and document your expenses.
Consider Mediation Instead of Litigation
Mediation offers divorcing spouses a number of benefits that do not come with litigation, including financial protection. Not only does this process help to protect financial assets in divorce by keeping costs down, but it can also ensure your financial affairs are kept confidential. This form of alternative dispute resolution can help spouses avoid a lengthy courtroom battle when it comes to dividing their assets, property, and debts — and gives them the opportunity to create a unique settlement agreement that works for their family.
Contact an Experienced Utah Divorce Attorney
When it comes to protecting your financial assets in divorce, it’s important to have a skillful attorney by your side. Based in Salt Lake City, BartonWood provides knowledgeable counsel to clients for a wide array of matrimonial and family law issues. To learn more about our legal services and how we can assist you with your case, call 801-326-8300 or contact us to schedule a consultation.