When Illinois couples prepare to get divorced, it is important for each spouse to protect their own finances. Since married couples typically intermingle their money and assets, getting divorced involves a division of everything the couple owns, including debts. One of the first steps a person can take is to close joint accounts. Closing joint accounts and opening separate credit card and bank accounts can prevent questions about whether joint debts were created before or after the couple's separation. It can also give each party the opportunity to establish credit in their own name.
Another step anyone who is planning to get divorced should take is to ensure they have their own health insurance. Those who are covered under their husband or wife's policy should investigate getting their own coverage through their employer or a broker. Life insurance policies should be updated to reflect the change in marital status and a new beneficiary should be assigned if divorcing spouses do not want their ex-husband or wife to receive the proceeds from their policy when they die.
In many marriages, one spouse handles most of the financial matters. In divorce though, the one that wasn't involved in finances must learn how much money they have and where it is located so they can work with their lawyer to divide their marital assets equitably. If a person isn't able to find all the money, an attorney may be able to provide advice on ways to determine how much the couple owns.
No matter how amicable the divorce appears to be, it may be advisable for those who are about to go through the process to consult with an attorney to ensure their rights are protected and that they leave the marriage with an equitable share of the couple's assets and debts. Property division can sometimes be negotiated as part of an overall settlement agreement.
Source: FOX Business, "5 Money Moves to Make During a Divorce", Holly Johnson, Oct. 8, 2013