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Unravelling Marital Finances Before Divorce

Untangling assets may be complicated for couples undergoing divorce. Spouses should separate commingled assets and protect their property when they divorce.

Separate property

Generally, a spouse’s property owned before their marriage does not have to undergo property division. Assets bought for themselves with an inheritance are usually separate property.

Bank accounts

Dealing with joint bank accounts should be the first step in untangling assets. Make a list of all accounts and identify the joint accounts.

Try to close joint accounts with your soon-to-be former spouse. If this is not possible, the accounts should be closed as part of the settlement.


Resolving joint loans and credit cards is important to assure that a spouse is not liable for spending or debt after divorce. Obtain an independent credit history to determine if there is shared debt or credit cards.

There are three options for dealing with credit cards, personal or vehicles loans and other joint credit and loan accounts. Couples can agree to pay them off immediately or take care of them later. Or they can do nothing.

The best option is to settle the balances now and close the accounts. This lowers the potential reduction of your credit score or having a former spouse neglecting to pay off a debt or continuing to spend.

A spouse may be stuck with the third option, doing nothing, if their soon-to-be ex does not agree to resolve debt. But a spouse can still remove their spouse as an authorized user on any credit card in their name.

Other accounts

Determine the details of each investment and retirement account. These may have different risks, taxes, and fees.

Account liquidation may be preferable but comes with transfer and withdrawal fees. Experts recommend selling investments first to divide potential taxes and capital gains.

Rules govern the division of most retirement plans and accounts in a divorce. A qualified domestic relations order must be issued for 401(k) and 403(b) plans.


To obtain sole ownership of the house, a spouse must refinance its mortgage in their own name. This may be difficult if the spouse is unemployed or has limited assets.

Spouses may sell the home and divide the proceeds. Keeping joint ownership and the shared financial burden may be complicated.

Financial independence

Spouses should also create their own financial identity. Opening their own bank account is essential. Apply for a credit card that is only in your name if you do not have one.

Attorneys can help seek a fair and reasonable decree. They can also protect their interests in negotiations and legal proceedings.




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