Three ways to protect your assets during a divorce

This article looks at three ways people who are preparing for a divorce can protect their assets.

Divorce is one of the most difficult experiences many people ever go through. Not only is a divorce emotionally difficult, but it often has serious implications for one's financial position. Even in the most amicable of divorces, spouses are still often left having to downsize their lifestyles to account for their newly single living situation. While divorce is hard, however, there are ways to protect one's assets and to maximize the chances of a favorable settlement. Below are just a few tips for ensuring the financial repercussions of divorce are kept to a minimum.

Know what's on the table

As CNBC points out, the only way to negotiate a fair divorce settlement is to know the extent and the value of the marital estate. One of the first steps that should be taken when a divorce seems to be on the horizon is to gather key financial documents, including bank accounts, credit card statements, insurance policies, retirement accounts, investments, and other financial documents, that will provide a clear picture of the major assets that can be divided. Non-liquid assets, such as automobiles, real estate, and collectibles, should also be accurately valued beforehand. If assets are undervalued or overlooked then chances are that one spouse will receive much less than he or she in entitled to from a divorce settlement.

Stay calm

Often the biggest impediment to reaching a fair divorce settlement comes not from the other spouse but from inside oneself. Divorce is often emotionally taxing and asking somebody to make rational and long-term financial decisions during one of the most emotionally difficult moments of his or her life is an almost impossible demand. As U.S. News & World Report notes, having support from friends, loved ones, or mental health counselors could be key to making these important decisions calmly. Not only could heated emotions lead to a divorce dragging on for longer than it should, but feelings of guilt and exhaustion could lead to a person quickly agreeing to an unfavorable divorce settlement.

Divorcing accounts

Most people would rather not have their ex-spouse continue to retain access to any joint accounts or credit cards both spouses shared while they were married. Anybody going through a divorce should take whatever steps are necessary to separate their finances from their soon-to-be ex-spouse's. Keeping accounts separate helps ensure one retains control over one's finances and that one will not face any unpleasant surprises - such as an unexpectedly high credit card statement - either before or during the divorce. Likewise, depending on the advice of a financial advisor, an ex-spouse's name should also be removed as a beneficiary from any insurance policies one may have.

Family law

A family law attorney should be contacted by those who are considering a divorce as soon as possible. An experienced attorney can provide valuable advice to clients about the steps they will need to go through during a divorce and help them prepare for what lies ahead.