Divorce and Your Money

In the short run, divorce is an emotionally wrenching experience for all involved. In the long run, it can sow the seeds of financial disaster if one spouse lets the other dominate the process. Divorce is rarely fair. This information can help you make it less unfair.

If you feel a split is imminent, take these steps first.

1.Consult a lawyer.

2. If you do not have a credit card in your own name, apply for one.

3. Apply for checking and savings accounts in your own name.

4. To protect money or investments held in joint accounts, withdraw half of the money. If you withdraw all of the money the court could order you to give half back. Another option is to change the signature authority on any joint account so that both of you must sign in order to complete a transaction.

5.. Collect all the information you can find on your spouse's bank accounts, mutual fund and brokerage accounts, pension plans and retirement funds, insurance policies, and any other financial asset, such as real estate.

6. Get credit reports for both you and your spouse.

7. Hunt up copies of state and federal income-tax returns from the past several years and make your own copies.

In a divorce proceeding, reliable financial information is crucial. What you can do with it will depend on the laws governing divorce in your state.

Community-property states. The community-property states -- Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin -- consider any assets acquired during your marriage to be owned equally by husband and wife, and they will be split 50-50 in divorce.

Non-community-property states. In the remaining states, so-called equitable-distribution laws govern the division of a couple's assets. Some states divide only assets acquired during the marriage, while others consider everything available for divvying up. But marital assets aren't necessarily divided equally. In some states the distribution laws take on a punitive aspect by considering which partner seems most at fault for the breakup.