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Divorce can cause difficult financial situations

Without the right preparation, divorce can cause financial turmoil amongst newly single or soon-to-be single Utah residents. Even if you get along with your ex-spouse today, there is no guarantee that you will get along with them throughout the entire divorce. Experts have some suggestions for handling the various financial aspects of a divorce to ensure that your finances are protected during a sometimes long and complicated process.

First, you will need to make sure that you have your own credit identity separate from your spouse. If you don't have an individual account, you should get one as soon as possible so you can use your joint income to qualify. Joint accounts should then be shut down and remove your spouse as an authorized user on any individual accounts to prevent them from charging things to your card. The balance on the cards can either be paid off now to ensure that your spouse pays their portion, or can be addressed later in the process. If you choose not to pay it off now, you may want to put your spouse's portion of the debt in their own account so that only they are responsible for it.

Another troublesome asset during a divorce may be your home. You or your spouse may decide to take on full responsibility for the house and the loan that comes with it. However, this may not be a practical option for people who cannot afford the payments without the support of their spouse. Instead, you and your spouse can agree to sell the house and divide the proceeds amongst yourselves. While it may be difficult on an emotional level, saying goodbye to your family home may be the best way to keep things simple. Another option may be to continue to share ownership of the home with your spouse by entering into a co-ownership agreement.

Lastly, you will need to take care of your investments. Look at each investment independently and determine the value and the impact of the asset on your taxes. Also, be aware of fees that come with liquidating an asset.

Source: NerdWallet, "How to Untangle Your Finances in a Divorce," Bev O'Shea, Hal M. Bundrick and Dayana Yochim, Junes 23, 2017

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