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7 Ways To Protect Your Assets During A Divorce

7 Ways To Protect Your Assets During A Divorce

According to statistics, nearly 40-50% of marriages in the U.S end up in a divorce. Besides being immensely stressful and emotionally draining, a divorce can also wreak havoc on your finances for many years to come. Here are a few tips to help you protect your assets during a divorce.

1. Assess Your Liquid Assets

It’s easy to become emotional during a divorce and attach sentimental value on keeping the house or car. Instead, you’ll want to focus on assessing the value of joint liquid assets such as savings accounts and investment portfolios. Receiving the house during a divorce proceeding may not be as financially advantageous as it may seem initially if you can’t afford the property taxes and upkeep costs. Finding a buyer can also be a hit or miss depending on the current real estate market.

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Make sure to assess the value of your assets correctly. For example, the value of an investment portfolio of stocks and bonds may fluctuate drastically over time. The value of a vehicle will also depreciate with time. You may want to focus more on assets that are less depreciable depending on how risk averse you are.

2. Consider Taxes When Appraising The Value Of Your Assets

Many people going through a divorce appraise their assets incorrectly because they forget to consider the tax implications on investment and retirement accounts. A retirement account is worth less than the stated balance because of the deferred tax payment owed upon withdrawal. If a party chooses early withdrawal, he or she will also be hit with a penalty in addition to taxes.

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3. Protect Your Credit Rating

Both parties will be held responsible for joint account credit card debt accrued during the marriage. It’s a good idea to pay this debt off and close the accounts as soon as possible.

You will also want to obtain a credit report from the three main reporting agencies; Equifax, Trans Union and Experian. This will let you know the status of each account on your credit report including if it is a joint or individual account, the current balance and payment history.

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If you have joint accounts you’ll want to pay them off and close the account. If you’ve added your spouse as an authorized user on any individual credit cards, you may want to contact your creditors and have them removed as a user.

4. Look For Hidden Assets

We like to think of our spouses as honest people but it’s actually quite common for individuals to hide their assets throughout the duration of a marriage. A business owner may add a friend on the payroll in order to hide income. Securities may have been sold without being accounted for.

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According to Los Angeles divorce lawyer Steven Fernandez, “Lying during divorce proceedings is against the law. When someone signs a Financial Affidavit, which is a formal disclosure of finances, he or she is swearing under perjury to disclose any and all information pertaining to income, assets, and expenses.”

5. Revise Your Will & Designated Beneficiary

If you don’t want your ex to receive any funds in case of your demise you’ll need to update your will. Getting divorced doesn’t automatically void your existing will. You may also want to update beneficiary information for any retirement, life insurance, and investment accounts if you don’t want your ex inheriting all of your hard earned assets.

6. Be Careful When Dating

Never move in with someone you’re dating before your divorce is finalized since this may affect spousal and child support payments. A judge may deem you as having more money available if you are splitting living costs with another person. If you do plan to date, keep it discreet. Dating during divorce proceedings may also fan the fire and cause your spouse to become more emotional and less cooperative.

7. Change All Important Passwords

Change the log-in and password for your online banking account. Your spouse may have access to old passwords and may be logging in to see what you’re up to and keep track of your expenditures in order to use it against you in court. Some spouses go as far as installing a key logger in order to monitor their ex’s online activity. Protect yourself by changing your password and installing anti-virus softwares that will be able detect spyware.

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Jacqueline Cao

Entrepreneur

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Last Updated on March 29, 2021

Life Insurance: A Secure Way To Protect Your Future.

Life Insurance: A Secure Way To Protect Your Future.

Life is a journey full of ups and downs. No one can actually predict what might happen the next moment; there are times where the happiest moments do not even take a second to turn into the gravest. Planning for your future can help you face such unwelcomed but irrepressible situations with much ease. We all want to make every memorable event of our life more special and to cherish all those moments happily and worry less, you must financially plan your future. But no one has control over life and death. Who would wish to see his family suffer in his absence? Insurance hands over the financial jeopardy of life’s happenings to an insurance company.

Importance of getting a life insurance

No one has control over life and death. Nobody would like to see their family suffering in an absence, and that’s why many people recommend life insurance. A life insurance plan is one of the best ways to secure the future of your family, even against those financial troubles after an untimely demise. These plans are safe and credible, and you could trust them for your family’s better future.

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On the other hand, a life insurance policy is a contract between a company (insurance provider) and policyholder in which the insurance provider ensures to pay a certain amount of money to the nominated beneficiary in case of the policyholder’s death during the term of the agreement. There are different types of insurance plans, and it is important for you to know the benefits of those plans such as a funeral, medical or some life expenses provided they are mentioned in the agreement.

Choosing the right insurance plan

If you’re about to select an insurance plan, you should consider some important factors:

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  • The time at which you start investing in a program and the number of family members you want to get insured. Obviously, a married man with two children has different needs compared to a single one. The number of persons who are dependent on an individual also varies from person to person.
  • The next thing you need to consider is you and your family needs. What are your child’s dream, your retirement plans, for how long would your dependents need financial support, any personal injury, etc. And do not forget those events or situations that will surely demand a huge sum of money.
  • The next thing one must consider is your current income. You should preferably choose a plan which you can afford.

Now you must be having a pretty clear idea of how to choose the best plan for you. Further, you should also compare various plans offered by different companies and numerous sites available online that help will you to compare them.

Differences between life insurance plans

Here’s a short brief of some plan categories you can choose according to your needs:

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  • Term Insurance Plan – You have to pay once, and your nominee gets the paid money under your misfortune demise. It ensures a person for a fixed time. If you survive the policy period, you do not get your premiums back.
  • Whole Life Policy – This plan continues for your lifetime. Under this, the policyholder has to pay regular premiums, until their death.
  • Endowment Policy –  In case the individual dies during the tenure, the beneficiary gets the amount assured. If the person survives the policy tenure, they gets back the premiums paid with other investment returns along with several other benefits.
  • Money Back Policy – In this a portion of the money invested is returned to the investor at regular intervals. If you survive the insurance term you get the entire amount back; else the beneficiary receives the entire sum assured.
  • ULIPs – These are the life insurance plans that offer you future security plus wealth creation options.

Many people do not opt for whole life policy and endowment policy because of the high amount of money you need to pay, while others may prefer to opt for these if they have a high life expectancy. Surely you will find the best one for you.

So what are you waiting for? Plan for your future and live a happier and carefree life today.

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Featured photo credit: aryehsampson.com via aryehsampson.com

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