When it comes to divorce and money, at least some financial strain is to be expected on top of the emotional trauma of ending your marriage. Unfortunately, with so much going on, couples are sometimes surprised—and often overwhelmed—by the changes that their personal finances are about to go through.
Controlling the Cost of Divorce
There’s no way around it: Divorce can be an expensive legal process.
“The longer you spend with attorneys figuring out asset division and custody, the more you end up paying and the longer your dissolution drags out,” said Rachel S. Ruby, a California-based attorney, former divorce mediator, and the author of the book “Divorce To Bliss,” in an email interview with The Balance.
As someone who has been through a divorce herself, Ruby advised trying to seek amicable solutions for dividing assets and custody, if applicable, even before hiring lawyers. In her divorce, Ruby and her ex-spouse agreed to split everything, and it helped defray some of the costs (other than some issues that were spelled out in an attached stipulations list).
“Most divorces are or become contentious so this is not possible, but if the parties work together, they can save a lot of money,” she said.
Splitting Joint Accounts
If you share checking and savings accounts with a spouse, it is recommended to either cancel those accounts and establish accounts in each individual’s name, or at least freeze them until the divorce process is final. If the account remains open, either spouse will be able to access the funds, and that can become a problem if one of the parties wants to be vindictive and drain the account.
State laws can often provide protection for you if your partner redistributes funds in a joint account to a separate one without consulting you. If this happens to you, consult with an attorney for the best guidance.3
To close a joint account, you and/or your spouse may need to physically go into a branch, though some banks may let you close your account via email, by phone, or in writing.
Ruby advised speaking with an attorney or financial advisor to understand the best timing for this process, however. For example, if you’re selling a home that is in both spouses' names, there may need to be one joint account in which to deposit proceeds until the sale.
“Our escrow officer was able to deposit net proceeds of the sale equally (what we had agreed upon) into our individual accounts, and once everything was done, we both signed off and closed the remaining joint account,” said Ruby.https://www.thebalancemoney.com/a-guide-to-the-most-common-financial-issues-of-divorce-1289262