Get Money Wise
6 Steps to take now if your marriage is in trouble.
- Protect Yourself
If your marriage is in trouble, there are some key steps to take to protect yourself. And while you may still be hoping that things will work out, there is simply no substitute for being prepared in the event that they don’t. Do not be lulled into complacency if you are working with a marriage counselor or clergy in an effort to save your marriage. And don’t expect that things will somehow magically get better if you wait long enough for your husband to “come around.” While you may be hoping for the best, you need to prepare in case your marriage cannot be saved. And even if your marriage can be saved, follow these steps to be financially wiser—which is always a good thing.
Knowledge is power and money is key. Set aside money and gather information now, so that you are in the driver’s seat regardless of what happens.
I have been through this myself, and in my family law practice, I have advised many women just like you. Whether the holidays left you questioning whether your marriage is going to make it, or if you are certain that you are ready to pull the trigger, do these 6 things now. I promise, it will save you.
In community property states, assets earned and acquired during the marriage are split 50/50. There are nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.
Open a bank account in your name. Open this account at a different bank from the one where you and your husband share a joint account.
Set aside money for living expenses and in the event you need to hire an attorney. Did you know that you can take half the money out of your joint account and put it in a separate account in your own name if you live in one of the nine community property states like California? You may not want to take out half the money all at once because it will alert your spouse and may cause checks to bounce; begin taking out smaller amounts now and put them in your new account so that you can hire an attorney if necessary and cover your living costs for several months.
Secure your assets. It is much easier to return items you have removed in order to protect them than it is to locate items someone else has spirited away. I’ve seen valuable wine collections disappear, coin collections go missing, and money evaporate. Take steps now to protect what is yours.
Check your credit score.
You need to build your own credit. There are few numbers in life that matter as much to your financial outlook and well-being as your credit score (known as the FICO score). A good credit score is crucial for financial success. It is one factor used by lenders to determine your creditworthiness for a mortgage, loan, or credit card. Your score can affect whether you are approved for credit and the interest rate you are charged. Prospective employers often check your credit score when you interview for a job. It is important for you to know what your credit score is and work to improve it if it’s not in the “good” range.
The three major credit-reporting agencies are Equifax, Experian, and TransUnion. You need to check your score with each agency because your score may differ between them. This is because some lenders report to all three credit agencies, but others do not. And since your credit report can contain errors that adversely affect your score, you need to check all three to make certain that they are accurately reporting. You can easily access your score online for free and track your credit-building progress on sites such as CreditKarma.com or AnnualCreditReport.com. A “good” credit score is generally considered to be 720 or higher. Lenders, however, have different standards for what they consider to be a good credit score, and so it is important to keep building your score to receive the most favorable interest rates and highest rates of credit approval. In the coming months, I’ll provide concrete tips for building your credit. This month, simply take the first step to find out what your credit score is.
Open two credit cards in your own name. You need to be the primary cardholder on at least two credit cards, if possible. You can have a wallet full of credit cards, but if your husband is the primary cardholder and you are the secondary, he can cancel those cards without your permission. So get at least two cards in your name now while you can use your combined credit score.
Gather and copy documentation for all assets, bank accounts, investments and retirement plans, even if they are in your spouse’s name. Copy anything with a dollar sign attached to it. Many women tell me their husband insists he is going to keep “his” 401K or pension. Wrong. If you live in a community property state, half that pension or retirement fund earned during the marriage is yours. If you live in an equitable property state, you are entitled to your fair share of the 401K or pension.
Most states follow equitable distribution laws. In these states, property will be divided between the spouses in a fair and equitable manner. There is no set rule in determining who receives what or how much. The court considers a variety of factors. For example, the court may look at the relative earning contributions of the spouses, the value of one spouse staying at home or raising the children, and the earning potential of each. A spouse can receive between one-third and two-thirds of the marital property.
Here is a checklist of documents to gather, copy and keep in a safe place:
- Employment Information—Paycheck stubs for you and your spouse for the last 12 months (or at least the last three months to the current date).
- Tax Returns—Last three years of state and federal income tax returns.
Pension/Retirement Programs—Copies of 401-K’s, investment programs, stock, stock options, bonds provided through the employer for both you and/or your spouse.
Insurance—Documents regarding insurance provided through the employer for both you and/or your spouse.
Real Property—Deeds showing the legal description of any real property owned individually or jointly with your spouse, escrow papers from the time of purchase, information from lender showing current mortgage balances, monthly payments, loan numbers, current real property tax statements, homeowners or fire insurance policies on all real properties, tax assessors statements.
Stock Portfolio—List of corporate stocks and/or stock certificates owned by you and your spouse, individually or jointly, the name and address of stock broker(s).
Cars, boats, trailers—copies of pink and registration slips, encumbrance (what’s owed), monthly payment.
Life Insurance—current policies with statements of any loans against them.
Promissory Notes and/or Deeds of Trust—copies of such records that name you and your spouse as beneficiaries.
Credit Cards, Loans—credit cards, creditor’s statements showing names, address account numbers, and balances presently owed. Financial statements of net worth prepared by you or your spouse for the purpose of securing bank loans or for any other purpose. Any other information that will help establish the net worth individually or jointly, for you and your spouse.
Bank/Credit Union Accounts—most recent statements showing balances, held in individual or joint names, savings passbooks, Certificates of Deposit.
Wills or Trusts
Written Agreements—premarital, post-marital written agreements with spouse.
First off, give yourself a pat on the back for taking care of these important steps. Then, stay tuned for more insider tips. I will be sending out a new checklist each month that addresses one of six key areas of your life, including finances, legal, real estate, career, children and well-being. You’ll receive this information right in your inbox, free of charge, and it will help you protect yourself and understand your options. I am a divorce attorney and a divorce survivor and I help women like you every day create new and better lives for themselves. I look forward to helping you, too.
I also invite you to join my private Facebook group at http://thedivorcehacker.com/community/ Private. This is a private, safe and secure place to go if you are in that yucky place not knowing what to do, but knowing that something must be done. We offer support, information and understanding. I will answer your questions and facilitate upbeat, healthy discussion so you can move forward.