What is a legal separation? And, how to handle finances during separation?
If your marriage doesn’t work out, amicable separation might be the next logical step. Separating from your spouse can be a very messy situation full of anger, regret, arguments, and a cluster of heartbroken emotions.
It’s a part of human nature not being able to think correctly during traumatic events. But to be calm and composed during these times is very important.
So, it’s advised to sort out your divorce and finances and handle your money correctly so that you don’t end up becoming broke and lonely at the same time. Don’t let your financial responsibility during separation be a burden on you.
Read on to find how to handle finances during separation.
These handy tips can effectively guide you on how to handle money as well as how to protect yourself financially in a separation.
1. Know all your assets
Before thinking about how to handle finances during separation, it’s crucial for you to understand your belonging, what you hold rights to, and what you both have as a couple.
Having married with separate finances is not a common practice, and when the divorce suddenly happens, you can find yourself with insufficient knowledge about your own funds. You need a clear understanding of your assets and financial rights after separation.
Assets also include what you need and want and what you should lawfully demand. Learn the laws on financial separation and the division of assets according to your state, and don’t be shy to seek professional help if you don’t or can’t understand anything.
Knowing your assets and financial responsibility during separation helps you prepare yourself for life after separation or divorce, and you’ll find yourself in a good state once all the mess is over.
If you are wondering, ‘does a legal separation protect you financially?’ then, yes, knowledge and preparation can save you an expensive legal battle and also helps you keep the assets that really belong to you exclusively.
2. Get to know marital finances
The foremost financial advice on how to handle finances during separation is to know your marital finances well.
If divorce discussions have been ongoing for a couple of months, then you should keep yourself in the loop and know where your husband or wife is spending, what they’re earning, and how they’re investing money.
This way, you can write down a plan for your kids and deal with their needs accordingly during such an emotionally heavy time. Make sure you have planned for the child-support financial responsibility during separation.
4. Close all joint accounts
This is the most crucial step and must be taken care of when you are contemplating how to handle finances during separation. If your spouse has any debts, you will be held responsible for it until and unless there is a legal agreement stating differently.
You need to take care of this financial responsibility during separation so that it does not become a permanent burden.
This termination of joint accounts and financial responsibility during separation helps protect you from post-divorce financial liabilities and is an essential step.
You should also change online passwords for social media accounts, emails, and your Apple, Android IDs, etc. Don’t forget to keep track of where your money is and whose money is in the said joint accounts.
Get credit cards in your name as soon as you can so that you can be a strong independent on your own.
5. Establish a new budget
Establishing a new budget for couples with no children can be easy for some. You both have to be responsible for splitting the bills and taking care of your needs for food and clothes.
The problem arises when there are children or if a spouse doesn’t earn. In cases like these, you must understand that you and your children can’t enjoy your lifestyle like before, and you will find it hard to maintain the status quo.
So, plan a budget when you are deliberating about how to handle finances during separation.
6. Don’t overspend
Are you still mulling over how to handle finances during separation?
This can be one of the tough decisions for you to make because when you’re on your own, you might be tempted to travel and afford expensive luxuries to take your mind off things, but you shouldn’t! Don’t add on more financial responsibility during separation.
This isn’t the time to waste money because if your separation leads to divorce, then there might be a problem; in such cases, you can be accused of dissipating assets and get in trouble.
7. Pay joint account debts
Even though you are separated, keep in mind that your debt is still married. It’s better to pay your debt for any joint accounts you might have with your spouse as soon as possible.
Get rid of debts and liabilities that you were paying for together with your partner.
Check your credit details for your accounts, handle them properly, and have your joint accounts closed as soon as you can. Manage your legally separate finances in the marriage strategically before your spouse can take advantage of such a situation.
8. Point out the date of separation
Every state has a different meaning of the date of separation. For some, it might be the day when one spouse lets the other one know they are filing for divorce, or it can be the date when your partner moves out. However, this date is significant because it helps in dividing the properties and income.
Anything that you might have before the date of separation will be divided, but anything you inquire after the time of separation will not be shared.
Perhaps you would like to have a look at the following video in which the speaker shares her own experience of divorce and what she learned about handling finances.
Reflecting on how to handle finances during separation is an essential step and shouldn’t be forgotten amidst the chaos and arguments. It’s a crucial step for you to take to have a good start in life after the separation.
For couples who can’t handle any decision without shouting, it’s advised to get a divorce mediator or an arbitrator to have a less messy financial settlement.
If you feel disconnected or frustrated about the state of your marriage but want to avoid separation and/or divorce, the marriage.com course meant for married couples is an excellent resource to help you overcome the most challenging aspects of being married.
Rachael Pace is a noted relationship writer associated with Marriage.com. She provides inspiration, support, and empowerment in the form of motivational articles and essays. Rachael enjoys studying the evolution of loving partnerships and is passionate about writing on them. She believes that everyone should make room for love in their lives and encourages couples to work on overcoming their challenges together.