If it looks like divorce is on the horizon it can be tempting to go on spending sprees. A spouse may do this as an emotional outlet. However, some spouses do so to keep their ex from receiving certain assets or funds in the property division process. The following are some ways to protect yourself from an over-spending spouse.
Execute a postnuptial agreement
If you spouse always had the tendency to overspend, you can protect yourself even if you have not yet decided to divorce by executing a postnuptial agreement. A postnup is like a prenuptial agreement, but a postnup is entered into after a couple is married, not before. In a postnup you can state who will retain which assets in the event of a divorce. This way, your spouse cannot dispose of these assets.
Dissolve joint accounts
If divorce is on the horizon, you may want to terminate joint bank accounts and stop pooling your income with your spouse. By having separate bank accounts and your own credit cards, you can set yourself up on solid financial footing during the divorce process and beyond.
During the divorce process you and your ex will each have to file a “financial affidavit.” This is a statement made under oath regarding your expenses and individual finances. This document often serves as a basis for settling divorce issues such as property division, spousal support and child support.
Protect your rights
Some spouses will try to gain advantage over their ex either before divorce or during the divorce process by spending down assets, sometimes without their ex knowing it until it is too late. This is unlawful, but it does happen and can lead to complex financial disputes. By understanding your financial rights and options both before divorce and during the divorce process you can make decisions that are in your best interests.