Navigating the choppy waters of a divorce can be emotionally and financially draining. This is especially true in California, which has specific laws and regulations. Protecting your finances should be a top priority.
However, when facing the emotional drain of divorce, you may overlook this important aspect of your divorce. Here’s how you can safeguard your financial interests during your divorce.
The community property law
California is a community property state, which generally means that all assets and debts acquired during the marriage are split equally between both parties, regardless of who earned or spent more. Familiarizing yourself with this principle can help you have realistic expectations and better strategize your financial decisions.
Gather accurate financial records
Start by gathering and documenting all your financial records, including bank statements, property deeds, tax returns and investment portfolios. This documentation will be crucial when it comes to determining asset division. If possible, determine which of your assets are separate. These are the ones you owned before marriage. Having this information will let you exclude them from the asset division process.
Separate new assets and earnings
After deciding to divorce, stop commingling funds. Open individual bank accounts and ensure that your paycheck and new assets are directed there. This helps in clearly distinguishing between marital and individual assets.
Limit joint debts
To prevent accumulating more shared debt, consider closing joint credit accounts or reducing credit limits. Ensure all expenses and liabilities taken on after the decision to divorce are in individual names.
While the emotional aspects of a divorce can be overwhelming, you must stay aware of your financial situation. A proactive approach and informed decisions can help safeguard your financial future after a divorce in California.