Divorce is a highly emotional and stressful time. It can often feel like your life is falling apart, and uncertainty about the future can cause significant anxiety, especially regarding your financial standing. Fortunately, there are steps you can take to ensure your financial stability after a divorce.
Seven Ways to Protect Yourself in a Divorce in Texas
1. Create a Financial Plan for Your Divorce
The first step to protecting yourself financially during a divorce is to create a plan for your financial future post-divorce. Establishing your financial goals and priorities early on will make difficult decisions easier later. For instance, do you want to retain ownership of the home? Or are you willing to forego the house in exchange for another asset? Choices like these are inevitable, and having your priorities outlined will help when making these decisions.
2. Open Your Own Bank Account
Most couples choose to establish a joint bank account when they get married. During a divorce, setting up a bank account solely in your name is crucial. This step is especially important for spouses without jobs or those who have been stay-at-home parents before the divorce. Opening a separate bank account under your name will allow you to start building better credit for your future. It also separates your spending patterns from your spouse’s, protecting you if your spouse goes on a reckless spending spree or seeks to harm you financially. However, consult with an experienced family lawyer before doing anything with marital funds, as Courts may have specific orders regarding the use and management of these funds during a divorce.
3. Separate Your Debt
Ensuring financial well-being requires being aware of your debt. The amount of debt each spouse assumes will factor into determining how to equitably divide the marital estate. Debts may be categorized as either joint or separate. Separate debt generally refers to any debt a spouse accrued before the marriage. Joint debt applies to most debts taken on during the marriage. Understanding what types of debt you may be left with following the divorce is important so you can figure out how to pay it off once the divorce is finalized.
4. Monitor Your Credit Score
Your credit score will inevitably be affected during a divorce, whether due to closing a joint account or having all your assets held in your spouse’s name. Be proactive about protecting and improving your credit. Request credit reports early in the divorce process to understand what your profile looks like and what you can do to raise your score. Though it will take time, acting now can make a big difference in the coming years.
5. Take an Inventory of Your Assets
Much of your property from marriage will be considered jointly owned, but not all of it. Ensure you note which assets belong exclusively to you. These individually owned assets may include inheritances, gifts, and other valuables brought into the marriage.
6. Review Your Retirement Accounts
Many divorcing spouses assume their retirement account will remain theirs following a divorce. In Texas and a few other states, your retirement account could be considered community property and therefore subject to division. Be sure to speak with an attorney or financial advisor to know what to expect concerning your 401(k), IRA, or other retirement account.
7. Consider Mediation Before Litigation
High emotions are to be expected during a divorce, but it’s important not to let them overwhelm your judgment. Even if you and your spouse disagree on a few matters, it can benefit both parties to resolve the divorce through mediation instead of litigation. This approach allows for more creative solutions and can often leave you feeling more satisfied than if a court makes decisions for you. Mediation can also be significantly less expensive than litigation. However, sometimes, litigation is unavoidable. In these cases, it is essential to hire an experienced divorce attorney.
Get Help Protecting Yourself and Your Future with Ashmore & Ashmore Law Firm
If you’re wondering, “How do I protect myself in a divorce in Texas?” one of your first steps should be contacting a family law attorney you can trust. Ashmore & Ashmore Law Firm in Rockwall, Texas, is home to some of the top divorce lawyers in the area. Our attorneys are experienced in both mediation and litigation to ensure you are protected financially throughout your divorce. Contact us today for a consultation to find out what we can do for you.
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