Dealing with Money When You Decide to Separate

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You likely have many different joint accounts with your spouse, including bank accounts, credit cards, loans, and more. Before untangling these accounts during your divorce, the first step in protecting yourself is to make sure your spouse can’t create even more financial problems during your separation. Are you about to go your separate ways? Here are a few preliminary money issues to take into consideration.

Do you have emergency cash on hand?: If your bank accounts and credit cards are frozen (which can happen if the judge decides to do so, or if your spouse freezes the credit cards), you will need money. Before this can happen, withdraw enough cash to get you through at least two weeks without using a credit card, debit card, or check. Keep it someplace safe and use it only in an emergency.

Dealing with bank accounts: If you don’t have a separate bank account in your own name, it’s time to open one. You can do so with as little as one dollar. What’s important is opening it, not how much you have in it. You need to establish your own credit and your own financial system.

Next you need to take a look at your joint checking and savings accounts. The best plan of action is to agree with your spouse to close these accounts and split the cash. Another choice is to keep one joint account functioning and use it to pay household expenses (for a jointly owned home) until the divorce is resolved. If you do this, you must agree how much each of you will deposit on a regular basis and you must trust that your spouse will not use this money for other things.

Are these steps right for you? Make sure you consult with your attorney before making any decisions about bank accounts. Your attorney can ask the judge to issue a temporary order determining who has access to which accounts or freezing certain accounts.