A divorce can create financial turmoil for those involved. Knowing how to protect yourself is key to getting a fresh start in a new life.
A study from researchers at Kansas State University revealed that couples who disagree about finances early in their marriage are at a higher risk for divorce than people who see eye-to-eye about the matter. Money plays an important role in just about any relationship, even down to the end.
People in Illinois and across the country who are facing the end of their marriages should know how to protect themselves financially. Heeding the following tips can give divorcees a chance at starting their new lives on the right foot:
1. Record all marital property
Under the Illinois Marriage and Dissolution of Marriage Act, all marital property will be divided on an equitable basis. This does not imply that assets are split evenly, but rather based on each spouse’s contribution to the marriage, financial stability and a number of other factors.
Marital property includes nearly everything acquired after the marriage, excluding inheritance or items that have been outlined in a prenuptial agreement. Experts advise divorcing couples to make a documented list of all marital property as soon as possible. This can ease the property division process and ensure that all assets have been accounted for.
2. Uncover hidden assets
Unfortunately, spouses often try to hide certain assets in an effort to protect them from division. Forbes magazine encourages people to look into the following ways money or other property can be concealed:
- Stowing cash in safe deposit boxes
- Creating alleged debt to friends or family members
- Making overpayments to creditors or the Internal Revenue Service
- Deferring salary and bonuses
As the Association of Divorce Financial Planners points out, people suspicious of foul play should hire a forensic accountant or similar investigator to uncover marital assets.
3. Be cautious of signing anything
In some situations, a spouse may try to convince the other to sign preliminary documents that outline how property may be divided. Emotions can often cloud a person’s judgment early in the divorce process when these documents are presented. Experts warn that any paperwork a spouse is considering signing first should be reviewed by his or her attorney.
4. Build your own accounts
At the first hint of divorce, people should take stock of their financial situation. A recent article in USA Today reminds spouses to start building their own income stream and bank accounts at an institution separate from where the joint account is held. Reducing unnecessary expenses can also help ensure that there is cash available.
The Illinois Department of Health reports that there were 33,789 divorces across the state in 2011, the year for which the most recent data is available. In some situations, a divorce has been in the works for years. In others, it may come as a surprise. No matter what the circumstances are, anyone who is considering ending a marriage should consult with an attorney.