Protecting Assets in Divorce
One of the first issues that spouses may encounter during a marital separation is the problem of protecting assets, particularly bank accounts, investments, personal property, and cash. There is a natural tendency toward mistrust at the beginning of a divorce case, which can lead to paranoia or reckless misdeeds if it is not handled properly. These tips can help to avoid stressful conflict during marital separation:
1. Start a new bank account. Each spouse might wish to establish a separate bank account where they will deposit their earnings. For some couples who have always deposited their paychecks into a joint checking account, this will be a change, but it is usually a healthy change. Even for couples who are separated while living under the same roof, this might be good advice – but spouses might want to consult with a divorce lawyer first, in order to understand their obligation to pay or right to receive spousal and child support. Generally a spouse who is paying the household expenses for the entire family will not be held liable for a cash support payment while the parties are living together, but each case is different.
2. Keep your statements and receipts. If spouses withdraw funds from a joint or marital account, or make payments to each other for living expenses, it is important to keep a “paper trail.” If there is no order to freeze joint or marital bank accounts, it might be wise to move funds out of a joint account into a separate account for preservation. Some couples agree to divide those accounts or provide advances from those accounts by mutual agreement. It might be advisable to give notice to the other spouse’s lawyer as soon as possible after the funds have been moved. It is also important to consider whether joint credit cards should be closed, frozen or transferred to separate credit cards.
3. Clean out the safe. Cash kept in the home should be promptly deposited into a bank account, so that it will be documented and preserved. In fact, you might wish to take a photograph to document the contents of a home safe or safe deposit box. Track down those videos that you made for insurance purposes in case of a fire or theft. Give everything to your divorce lawyer. Dealings in cash might raise suspicions in the minds of the lawyers and the judge, so creating a paper trial is beneficial.
4. Split up the china and crystal, if you can. Furniture, premarital property and household goods might be divided when spouses physically separate. The courts do not like to get involved in these issues, so it is important to limit the scope of disputes by trying to work it out first. Most judges encourage spouses to exchange lists of property that they want to keep before it is moved, and narrow down the disputes to a few items. The courts are more willing to resolve these disputes if they are minimal. It is also a good idea to place family heirlooms in safekeeping so they don’t become hostage to the negotiations.
Each case is factually different, so the advice of a divorce lawyer can help to clarify and resolve these issues before they become disputes in court. Above all, stay calm. Everything will be accounted for in the end.