Getting a divorce probably wasn’t a life event you anticipated, but that doesn’t mean you’re powerless to its financial impacts. Here’s advice from leading divorce experts on how to manage divorce and finances.

Use Knowledge as Financial Protection

Knowledge is power when it comes to protecting your finances during divorce. Gather account statements for each deposit, retirement, brokerage, mortgage, credit card, and loan account you and your spouse have. Make copies of deeds, wills, marriage, and birth certificates. Because much of this information may be required in divorce proceedings, creating a simple spreadsheet with account numbers, creditor names, balances, and date of the balance can keep you organized.

Review new account statements as they arrive and maintain current records. Nicole Noonan, a matrimonial lawyer and the CEO of divorce finance provider Novitas US1 says that if a spouse withdraws money from an account or uses joint credit cards for something other than paying legitimate joint marital bills during divorce proceedings, the court can order the spouse to reimburse the marital estate.

Closing Joint Bank Accounts isn’t Enough

Blake Hilty, an associate attorney at the family law firm McKinley Irvin2, recommends obtaining a copy of your credit report to make sure you’ve accounted for all the loan and credit accounts you and your spouse share, and to confirm what is owed on them. Though closing joint accounts may seem like the logical way to separate finances, Hilty says it may not be the optimal solution, for two reasons: some creditors might refuse to close an account with a balance, and closing accounts could lower your credit score. “As an alternative [to closing accounts], consider a court order that prevents accumulation of more debt on the account,” advises Hilty. If you are concerned that your spouse will try to open new credit in your name, Lisa Decker,3 a certified financial analyst and real estate collaboration specialist in divorce, says it might also help to initiate a security freeze with the credit bureaus. While this may add extra hurdles to opening your own legitimate credit (until you have it removed), it will prevent new creditors from accessing your credit report without your express approval.4

If you have joint bank accounts that you’re separating, keep records of account activity. “If individual bank accounts are established as a result, note the amount of money each spouse took from the joint bank account. This will be considered a pre-distribution to each spouse when the final property division is completed,” explains Hilty.

Devise a plan for health insurance.

If you’re covered under a spouse’s healthcare insurance plan, Hilty says there isn’t “a cut and dried solution” to ensure you’ll maintain that coverage during the divorce process. “Talk to an attorney. Protection in the form of a court order may be sought to ensure continuing health insurance coverage.”

Change your beneficiary designations.

Update beneficiary information on all accounts/policies with beneficiary designations —including life insurance policies, and deposit, investment, and retirement accounts. If you intend to change your name post-divorce, Hilty says to update your name on accounts accordingly.

Budget for Post Divorce Finances

Regardless of your divorce settlement or earning power, Decker says it is wise to expect and plan for financial changes. “For average folks, divorce rarely elevates someone to a better standard of living than when they were married; it simply costs more to run two households than one.” Create a budget that reflects your new living expenses and income, less any alimony or child support you’ll owe. Proactively adjust your lifestyle as necessary to ensure you don’t fall into debt or otherwise hinder your future financial security.

Balance Transfer


Pay Off Debt Faster with a Balance Transfer.

Lastly, empower yourself with a forward-looking financial plan — and consult with a financial professional if you’re not sure where to begin. “Set financial goals for the next chapter of your life. Stay strong and know that this difficult time will end,” says Noonan.



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