Protect Your Finances During a Divorce
Remember the wedding for your Army buddy you attended a few years ago? Well, there's a chance that couple is on their way to divorce court today. Despite a decline in Army divorce rates, your friend would join the 2.3 percent of married officers that divorced in 2006, reports the American Forces Press Service.
What's more, if your buddy is female she stands to lose more money once the divorce is final. CNNMoney.com reports that a woman?s standard of living decreases by 27 percent after a divorce. Conversely, the man?s standard of living increases 10 percent. The reason: most women leave the important financial decisions to their husbands during the marriage, according to CNNMoney.com.
1.) Read your financial statements. Read every financial statement you are aware of, this is the best way to get an idea of your financial situation. Make sure that you calculate all of your expenses, such as household bills, and tuition, then compare that to the income reported on your tax return.
2.) Copy everything. Try to make copies of your tax returns, 401 (k) statements, life insurance policies, etc.
3.) Keep an eye on your credit. Keep copies of any credit card statements, and maintain good credit in your own name. In the event of a divorce, your ex's bad credit can haunt your financial choices for several years. By keeping good credit in your name, you can fight liability for outlandish debt incurred by your former spouse.
4.) Put your name on all financial documents. Include your name on the title or deed of property that you and your spouse purchased together. Several states consider property purchased during the marriage marital property, but individual state laws may vary, reports CNNMoney.
5.) Revise your will and insurance policies. Once you're married it's wise for both spouses to create a will. It should clearly express the division of property and assets, as well as reflect the change in beneficiaries. If a spouse remarries and then dies without making changes to his or her will or policy, the assets will revert to whoever is listed as the beneficiary -- or in this case, the ex.
You and your spouse promised to stay together until death parts you. But if divorce should part you and your spouse before the good Lord does, it's a good idea to ensure that your finances are safe.
For more financial advice and information, visit Military.com's Finance Center.