Divorcing spouses in Massachusetts must take steps to protect their finances and credit early on in the divorce process. The impact of not doing do will last years after the ink on the divorce decree dries. In order to protect assets, income and credit, the following are steps that everyone going through a divorce must take.
Start with an Asset/Debt Inventory
It is important to know where all the money is, and how much is there.
- The asset inventory should include an appraisal of physical assets including homes and businesses, bank accounts, investment accounts, and retirement accounts.
- Similarly, liabilities must be itemized. These include mortgages, student loans, personal loans, and credit cards.
Open Personal Accounts and Close Joint Accounts
- It is a wise idea to open personal bank and credit accounts as soon as possible.
- Doing so limits the possibility of financial tampering by the other spouse.
- It is also advisable to close joint credit card accounts at the earliest possible convenience.
- If it is not possible to close a joint account immediately, it is a good idea to inform the creditor that a divorce is pending and that any future expenses on the account will be attributable to the other signatory on the account.
- Once that letter is sent, the account should not be used for any reason.
Protect Physical Assets
- If the divorce is hostile, it is advisable to secure and protect personal property in a safe location in order to shield it from destruction or theft.
- Family heirlooms, artworks, jewelry, etc. should be itemized, their value assessed and then stored in either a safe deposit box or a guarded self-storage facility.
Put a Flag on Credit Monitoring
- The credit bureaus should be notified that a divorce is imminent.
- This can help ensure that unauthorized accounts won't be opened.
- Any accounts that must remain open until the final decree should be closely monitored for purchases so that can be factored into the division of assets/liabilities.
Build a Budget
- Divorce means the loss of income from the other spouse.
- This will have a significant impact on the monthly budget.
- Building a budget is essential to understanding how much can be spent on housing, insurance, food, clothing, etc.
Should you be in the midst of a divorce or contemplating divorce, contact the Law Offices of Renee Lazar at 978-844-4095 to schedule a FREE one hour no obligation consultation.