“Jennifer, my entire world has just crashed in front of me; David told me at breakfast this morning he is leaving us. He has fallen head over heels for a woman he met eight days ago. Yes, you heard that right; he met her eight days ago.”

Susan and David, in their 60s, had a tumultuous marriage that lasted for 40 years. They faced more than their share of challenges. Building a new business in a new country when they arrived in the US as newlyweds was one of them. While the business thrived, their marriage did not.

With almost half of marriages ending in divorce, here is a list of what you need to do should you decide to separate.

Take Stock of Your Finances

What Do You Own?

First, make a list of property you own jointly or separately. Same with debts and expenses. Then consider how will you divide any property – the matrimonial home, the rental, the cottage?

List your financial institutions and account numbers for your bank accounts, credit cards, loans, and investments.

Make sure you have copies of financial information: statements for outstanding loans, recent pay stubs, and your tax returns for the past three years.

Waiving Joint Account Statements

When you co-sign for a loan, credit card, or line of credit, each of the joint borrowers has the right to receive the same information from the lender about the loan.

For example, if you cosigned for a credit card with your former partner, the lender must give each of you copies of the credit agreement and the monthly statements, unless you consented either verbally or in writing to waive this right.

Negating Waiver

If you have already waived your right to separate disclosure, you can change your consent if you decide you would like to receive information about the joint account or loan.

Making Informed Decisions

Know your rights and responsibilities related to joint accounts and loans so you can decide what to do with the joint assets or debts you share with your partner. Get advice from your lawyer on the best way to handle these.

Contact your financial institution for advice on how to protect your interests in your joint accounts, such as preventing further borrowing from a line of credit or withdrawals from a joint bank account.

Keep Relevant Documents and Get Acquainted with Specifics

While you are working out your separation or divorce, keep bills and receipts for expenses related to your family. This will be helpful later when you are working out how to divide your property.

If you don’t close your joint accounts and loans, both of you may continue to be legally entitled to the funds in any joint accounts, as well as responsible for repaying any debts, even if your separation agreement states that only one person is responsible.

If one borrower doesn’t pay the debt, the lender can demand that any borrower listed in the loan or credit agreement pay the entire amount or continue making regular payments.

For certain credit cards, authorized users (also called “secondary cardholders”) can be held responsible for any outstanding balances, even if they did not sign the credit card application. To find out whether you are responsible, read your credit agreement or ask your lender.

Once you have closed joint accounts or paid off joint loans, check your credit report to make sure your financial information has been updated.

Establish Your Own Accounts and Deal with Joint Accounts

Make Your Accounts Your Own

Open your own checking and savings accounts and establish your own credit if you haven’t done so already.

Then go ahead and update your direct deposit information for paychecks, government checks, and any other regular payments you receive to ensure they are deposited to your own account.

Credit History

Make sure you have a credit history or start one. It’s important to have a credit history if you want to apply for credit or loans, such as credit cards or a mortgage. Some landlords and employers will check your credit history before considering you for an apartment or a job.

This can be an issue if most or all of a couple’s accounts and bills were registered and paid under one spouse’s name. As a result, the other spouse may have a low credit score. Take steps to build your credit history so that you have more financial options.

How Will You Split Your Pensions? And What About Extended Health Care Benefits?

This is of greater concern if one partner makes a substantially lesser income or may have taken time off work to raise the children.

Health care benefits are not equal from one company to the next. This is of greater concern if only one partner worked.

What Else to Consider

• Take your time before jumping in with someone new!
• Get emotional support from a family counsellor or a minister at your church.
• Practice self-care.
• Do not pit your adult children against your spouse. They will always be a part of him/her. No matter how old your adult children are, they will experience a sense of loss if your marriage were to end. They do not need to face an additional loss of a relationship with a parent as a result of the separation.

Where to Get Legal Help

Divorce is both financially and emotionally stressful. Anyone thinking of separating should seek legal advice as soon as they can. The laws that apply to financial matters such as property division and spousal support depend on where you live.

If you and your former partner need assistance in reaching an agreement on these issues, you can consult several resources:

• lawyers and notaries – who specialize in family law
• mediators
• arbitrators
• financial advisors
• credit counselors.

Have you been considering a divorce? Do you think you will experience difficulties splitting joint property, accounts, etc.? How can you help yourself in the financial department before making the final decision to divorce? Do you have any specific questions about divorce financial planning? Please share them in the comments below.