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Financial planning is essential during a divorce

On Behalf of | Apr 6, 2018 | Divorce

The best time to prepare for divorce is well ahead of the actual court filing. Therefore, unhappy Maryland spouses interested in protecting their finances should take steps to minimize the harmful effects of marital dissolution. Every situation is different, but there are some basic precautions that can help make the financial transition to post-divorce life a bit easier.

Keeping a personal checking account is important for anyone who thinks divorce could be in the future. Doing so transparently is recommended to avoid being later accused of hiding assets. However, having access to money for legal fees and living expenses is critical. A good rule of thumb is saving or setting aside roughly three months of living expenses in addition to the cost of a legal retainer.

Closing joint credit accounts is also an important step that can limit post-divorce debt. Getting copies of credit reports for both spouses will be helpful in getting a clear picture of marital finances. To help ensure a fair settlement of joint assets, one should know the value of their retirement and investment accounts. Withdrawing half of the funds from a joint account is acceptable, but clearing out accounts may result in a court requiring reimbursement to the other spouse.

Protecting valuable property is also recommended. This may require removing items from the residence for safekeeping. However, liquidating joint property is not prudent. If necessary, a soon-to-be ex could keep valuable items in a safe deposit box.

Unraveling intertwined personal and financial lives can be a complicated process. Consulting an experienced divorce attorney can help anyone thinking about ending a marriage plan an appropriate exit strategy.

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